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Nigeria at the Global Anti-Corruption & Integrity Forum

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From 30-31 March 2017, the OECD hosted the fifth edition of the 2017 Global Anti-Corruption and Integrity Forum on the theme, ‘‘In the public interest: Taking integrity to higher standards.’’ Nigerian Vice-President Yemi Osinbajo participated as the keynote speaker. In his statement entitled, ‘‘United action is the key,’’ Osinbajo highlighted the immense challenges that corruption and illicit financial flows pose in developing countries. However, as a cause and also as a consequence, most developing countries lack strong institutions to combat these challenges. According to Osinbajo, ‘‘International collaboration is therefore the smartest and most effective approach to apprehend and deter perpetrators and ensure restitution of stolen assets’’ […] Only united global action has the power to reverse this threat,’’ the vice-president declared. Osinbajo also called for more inclusive participation from developing countries in the crafting of global initiatives designed to fight against corruption and illicit flows. “The OECD G20 and G8 anticorruption initiatives should have developing countries at the table. The demand and supply side of international corruption and illicit financial flows may be better served with this inclusive approach,” he said. Potential collective intervention areas include: financial transfer and jurisdiction transparency, open contracting and information systems and the global framework on stolen asset repatriation. The whistle-blower policy, launched by the Nigerian government in December 2016, aims to facilitate the recovery of looted funds and has already produced some promising results.

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United action is the key,  by Yemi Osinbajo, Vice President of Nigeria (transcribed from the video recording)

 

There is now hardly any credible opposition to the notion that corruption and illicit financial flows constitute perhaps the greatest challenge to development and this is especially true of developing countries. Besides, we have seen how in Nigeria in recent years, how corruption has directly fuelled the terrorist insurgency in north-east Nigeria and how, in turn, this has led to one of the greatest humanitarian disasters in the world: twenty-thousand fatalities and two million displaced. Also the adverse implications for education, healthcare, social services, infrastructure and indeed the quality of lives, no longer require making a case.

 

Indeed, there is a real sense in which corruption, especially grand corruption should be regarded as a crime against humanity. Corruption and illicit financial flows are different, but they are intertwinned. This is because for practical purposes, it is an eminently more sensible approach to treat most of the sources of illicit financial flows as corrupt activity within the broader use of the term. It is also clear that most economies ravaged by corruption, usually both as a cause and consequence, have institutions that are too weak to fight corruption and illicit financial flows. International collaboration is therefore the smartest and most effective approach to apprehend and deter perpetrators and ensure restitution of stolen assets.

 

Already much commendable work has been done in creating a robust international framework for tackling corruption and illicit financial flows and the OECD has been a remarkably effective actor in these efforts. These initiatives include the Global forum for transparency and exchange of information for tax purposes, the Multi-lateral convention on mutual co-operation in tax matters, an OECD initiative, the Extractive Industries Transparency Initiative, Base Erosion and Profit-shifting Project, the Section 1502 and 1504 of the Dodd Frank act, a US legislation, the Automatic exchange of information, an OECD G20 and G8 initiative, the Anti-bribery convention, the Public registry-the UK’s public registry, United Nations Convention against Corruption, the Recommendations of the financial action task force, the Open Government Partnership and the United Nations Task Committee Initiatives.

 

In West Africa, efforts to strengthen regional co-operation are underway. The draft ECOWAS common investment code of 2013 provides that member states should conclude treaties to allow for exchange of information between the fiscal authorities of the various jurisdictions. The treaty would also provide for identifying tax havens and examining their taxable bases, rates and fiscal administration through the establishment of a regional body in accordance with the ECOWAS revised treaty. Before I left Lagos yesterday, our cabinet ratified a treaty on ECOWAS tax administration which would open the way for greater co-operation amongst West African states in the exchange of tax information. Internally, we established a presidential advisory committee against corruption, we also established an anti-corruption and criminal justice reform fund with the support of three international development partners: Ford, MacArthur and the Open Society - West Africa. Our Whistle-blower initiative launched barely eight weeks ago has achieved great success and praise both locally and internationally. We have also announced a tax amnesty programme within the context of voluntary disclosure. We have signed several bi-lateral, mutual legal assistance treaties on collaboration on financial crimes and corruption with numerous countries within and outside our region. The latest being with the United Arab Emirates and this we ratified just this week.

 

Of particular note on the continental level is the ground-breaking work of the Thabo Mbeki panel on illicit financial flows from Africa. The initiative which was sponsored by a joint commission of the AU and the ECA were alarmed at the prospect that most African states despite earnings and official development assistance would not meet the Millennium Development targets in 2015; noted that Africa loses at least USD 50 billion annually in illicit financial flows. The panel’s far-reaching conclusions and recommendations again underscore the overwhelming importance on global collaboration especially to bridge the hug capacity gap between the large corporations and organised crime identified as the foremost perpetrators and facilitators of corrupt activity in and also, illicit flows from Africa.

 

Yet more needs to be done, first as rightly noted by the Thabo Mbeki Commission, the global architecture against corruption and illicit flows remains weak, incomplete and complicated in many important respects. For many African countries, operationalising some of these mechanisms may be expensive, cumbersome and simply sometimes, beyond their existing capacities. Second, developing countries are often left out in the crafting of important initiatives as for example the current conversations and measures being taken on the OECD’s Base erosion and Profit-shifting Project (BEPS).The components of which are of importance to economies of developing countries. The OECD’s G20 and G8 anticorruption and integrity initiatives should have developing countries at the table. The demand and supply sides of international corruption and illicit financial flows may be better served by this inclusive approach.

 

Mr Secretary-General, we must work collaboratively to ensure transparency in financial transfers and outlaw secrecy jurisdictions. There must be more rigorous enforcement of the rules promoting transparency in the international banking and financial systems, especially mores stringent KYC rules, custom identity, source of wealth and even country of origin. Countries hosting global financial centres and other usually targeted destinations of illicit flows must be held more accountable to enforce mechanisms which ensure transparency of ownership, control, beneficial ownerships, trust and other legal contrivances that may be used to camouflage financial or other assets.

 

Open contracting and information systems are also crucial. Responsible government authorities ought to have information about which companies won what contracts and what they have paid as taxes to governments in host and home countries. This is especially important for the extractive industry. Nigeria is committed to these standards having joined the Open government partnership in 2016. The tracing, freezing and return of stolen assets have proved in many cases to be exceptionally difficult for most African countries. We, in Nigeria, have seen just how difficult it is to get back stolen assets from the international financial system. Banks that ought not to have received those funds in the first place, even if the most routine questions were asked.

 

A robust global framework on repatriation of stolen assets which ensures quick restitution to victim countries is long overdue. Your excellencies, there is a consensus that corruption and illicit financial flows out of Africa inexorably delay the attainment of development goals, worsen practically all human development indices and trap the majority of her people especially the most vulnerable in a cycle of misery. Only united, global action has the power to reverse this threat and we respectfully urge that this power be exercised more vigorously and without further delay.

 

Thank you very much.