Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1698926111163.pdf (Uganda)
REPORT OF'THE WORK SHOP ON THE ROLE OF PARLIAMENTARIANS IN COMBATING ILLICIT FINACIAL FLOWS FROM AT'RICA HELD IN ABUJA NIGERIAi 24rH - 26rIJ APRIL, 2018 1.O Introduction Following nomination by the Rt.

Hon.

Speaker, I and Hon.

Nabayiga Idah travelled to Abuja Nigeria and participated in the workshop on "THE ROLE OF PARLIAMENTARIANS IN COMBATING ILLICITE FINANCIAL FLOWS (IFF) FROM AFRICA" with a special forcus on "BENEFICIAL OWNER SHIP INFORMATION ASSET RECOVERY AND TRANSFER PRICING ABUSE".
The workshop was conducted and facilitated by the African Development Bank, (ADB) from 24th to 26th APril 2018.

At the end of the three days deliberations, the workshop adopted twelve (12) strong recommendations urging African Governments and regional bodies including; African Union, ADB, African Tax Administration Forum, the FATF-Style Regional Bodies, EAC, ECowAS, SADC etc to take steps in establishing mechanisms to combat IFF.
Partiaments being central in processing legislations for member states were strongly called upon to develop anti IFF laws in order to reduce the vice in Africa.

1.1 TOPICS PRESENTED AND DISCUSSED The main topics presented and discussed by experts in financial fields as well as security practitioners dealing with IFF in different states included the following; ' i.

Why is IFF a matter of Concern to African Development Bank ii.

Reducing opportunites for abusive tax practices and tax avoidance iii.
Tax Evasion, Tax Avoidance, Transfer Pricing, Trade Mispricing and Trade-based money laundering - concept and issues iv.

beneficial ownership information; concept, issues and challenges v. Country Experiences in Confronting Corruption, Money Laundering and Illicit Financial Flows llPage vl.

vii.

viii.

ix.

x.


Illicit Financial Flows: Concept, Issues, Challenges and Developmental Impacts Improving Asset Tracing and Recovery Mechanism The Role of ADB in combating IFF in Africa The role of Parliament in IFF oflice of Integrity and Anti-corruption (PIAC)- Ghana's experiences t.2 Details The workshop brought together parliamentarians from 12 African countries and received extensive media coverage.
These are Botswana, Erypt, Ghana, Kenya, uganda,Lesotho, Liberia, Malawi, Mauritius, Nigeria, Tanzania, Gambia, and Zambia.

The workshop also attracted the participation of national and international experts and practitioners in the field of taxation, financial crimes, and Financial Intelligence Units.
Other experts included participation from the Office of the Vice President of Nigeria, the Inter-Governmental Action Group against Money Laundering in West Africa (GIABA), the Nigerian Financial Intelligence Unit, Ghana Financial Intelligence Centre, and the Liberia Financial Intelligence Unit.
The workshop also benefited from the perspectives of the African Legal Support Facility, Tax Justice Network-Africa, Pan African Lawyers Union, Chartered Institute of Taxation Ghana, West African Union of Tax Institutes, Kenya Revenue Authority, Nigerian Corporate Affairs commission, and Economic and organized Crime office, Ghana.
1.2.L Workshop Objective The overall objective of the workshop was to review challenges African countries face in fighting against Illicit Financial Flows (IFFS) and share countries'best practices and in the fight against IFFs.
This entailed exploring measures that some African Parliaments have instituted to combat IFFs; review commonalities in tackling IFFs and propose appropriate legislation; and arrive 2lPage at an agreement on how to implement recommendations of the High Level Panel (HLP) report on Illicit Financial Flows from Africa.

L.L.z Specific Objectives i.

To review challenges African countries face in fighting against IFFS; ii.
To learn good practices and share experiences from other countries in the fight against IFFs.

iii.

To explore what other African Parliaments have done in combating IFFs; iv.

To bring together key issues in tackling IFFs and guide Members of Parliament on how to use the issues in producing legislation that witl help to deal with IFFs from Africa; and v. To agree on how to implement recommendations of the HLP report 1.
1.3 Discussion Points The workshop permitted parliamentarians an avenue to engage with experts and practitioners on IFF and their prospective roles in translating the key recommendations of the HLP Report on IFF.

A key area of focus was Beneficial Ownership Information, Asset Recovery, and Transfer Pricing Abuse, into laws that respond to country-specific needs.
Participants appreciated that the High-Level Panel on Illicit Financial Flows from Africa estimated that Africa loses more than US$50 billion annually in IFFs.

This was mainly attributed to commercial activities including tax evasion, transfer pricing, trade mispricing trade mis-invoicing.

Other criminal activities associated with IFFs such as money laundering, bribery, corruption, and other forms of transnational organized crime were also implicated.
Among other topics, participants discussed the concept, issues, challenges and developmental impacts of IFFs in the context of the recommendations of the High level Panel Report.

This provided sufficient background on the AfDB policy and strategic framework on prevention of IFFs and enhanced their appreciation of the various IFF terminologies (tax Evasion; tax avoidance; transfer pricing; trade Mispricing; trade-based money laundering etc).
The 3lPage workshop sessions particularly focused on the concepts of beneficial ownership information and the role of Parliaments in legislating to minimize IFFs.

Participants emphasized that the hurtful effects of IFFs on Africa's development and governance is immense.

They drain government resources and undermine investment and trade-related revenues, and erode the tax base.
They also divert resources away from priority sectors such as ener$/ and power, agriculture, infrastructure, health, and education, thereby leading to slower economic growth, which in turn may slow poverty reduction efforts and widen inequalities.

Regional initiatives in Africa to enhance tax compliance and reduce the scope and impact of IFFs were a highly recommended issue.
Fifty-two 52 African countries have now committed to implementation of the FATF Standards on Anti-money Laundering and Countering Financing of Terrorism (AML/CFT), while a further twenty-two countries actively participate in current efforts by the Egmont Group of Financial Inteltigence Units.
On taxation, the African Tax Administration Forum (ATAF) continues to play a key role in enhancing the capacity of African tax administrations to counter non-compliance, and its actions have been supported by international partners, including the AfDB and the United Nations.
Participants also noted that despite these efforts, much remains to be done, as the misuse of tax treaty provisions and transfer pricing practices, and the fraudulent mispricing and mis-invoicing of trade transactions continue to shift profits and capital out of the continent and erode domestic tax bases.
They agreed that these practices pose considerable danger to the continent's domestic resource mobilization (DRM) efforts and consequently the ability of African countries to attain the United Nations'sustainable Development Goals.

Participants therefore, agreed that African states must continue to broaden their domestic tax bases and intensify efforts to protect them from abuse.

4!Page Participants emphasized the importance of understanding and finding practical solutions to two challenges.
The first is to obtain, on a timely basis, accurate and adequate information on the ultimate beneficial ownership and control of the corporate organizations and arrangements used to drain resources from the continent.

The second are the methods to facilitate the systematic and timety return of assets stolen from the continent and hidden away outside the continent.
In this regard, participants hightighted the role that tax transparency and exchange of information, as well as greater international cooperation in the recovery of stolen assets, can play in the fight against IFFs.

To this end, participants stressed the importance of greater inter-agency cooperation, at both a domestic and regional level, in collecting, storing, analyzing and sharing data related to trade, taxation, and other relevant financial information.
Participants highlighted the abuse to which shell companies, trusts, foundations, and various other complex and opaque corporate arrangements can facilitate both the commission of predicate offences, including bribery, corruption, transfer mispricing, and tax evasion; and the laundering of the subsequent proceeds.
To this end, they emphasized the critical importance of identifying the ultimate beneficial owner(s) in detecting, tracking, and preventing this type of abuse, by enabling tax authorities, law enforcement agencies and financial intelligence units to more effectively and efficiently "track the money''.

Participants also felt that better access to information on beneficial ownership could enhance the capacity of authorities to deal with aggressive tax avoidance.
It was also recognized that increased transparency of beneficial ownership will support law enforcement efforts to identify and recover stolen assets.

Participants recognized the important role of parliaments in the fight against IFFs through its functions of; promoting good governance in public funds 5lPage management for enhanced growth and poverty reduction, holding the executive to account; and its oversight function over public financial management.
1.1.3 Issues for consideration under HLP It was noted that there is no specific law that deals with IFFs, therefore, among other recommendations, HLP agreed that African countries should consider doing the following: i.

Work towards promoting transparency as an essential tool in combating IFFs in respective countries and Africa as a region; ii.

Put more effort in closing all routes of IFFs so that there is no chance for perpetrators to engage in this malpractice; iii.
Deal with abusive transfer pricing in order to curb IFFs from Africa completely; and iv.

Enhance the spirit of Political wilt and corporation in order to achieve a corunon goal in eliminating IFFs from Africa.

v. There was need to promote a compliance culture to existing laws Some of the salient strategic considerations from the HLP Report included: 1. ii.

iii.

iv.

v. vi.
Identifying the existence of international treaties and their correlation; Establishing of the Financial Action task force Understanding laws in the respective jurisdictions Making efforts in tracking where Assets are hidden Enhance monitoring mechanism in detecting IFFs in the region, Developing and strengthening partnership with multilateral and bilateral agencies 2.O Overall Workshop Communiqu6 At the end of the three days workshop, a Communique was issued sumarising the main out comes of the workshop as follows : Having deliberated extensively on the above, participants identified a number of actions as priorities to be pursued by African parliamentarians and governments, as well as, regional and international organizations, including the African Union and the African Development Bank: L Participants renewed their commitment to the fight against IFFs and agreed to pursue renewed political commitment from the executives and decision 6lPage makers to combatting IFFs, improving financial transparency, and undertaking the timely repatriation of stolen assets from the continent with the aim of meeting the relevant Sustainable Development Goals by the 2030.
In this regard, participants would work towards ensuring that combatting IFFs is prioritized and mainstreamed into their respective national sustainable development agendas.

2.
2.

Participants committed to strengthen good tax governance through the enactment of appropriate laws, and to support the efforts of government to develop and implement specific policy measures and adequately funded institutional frameworks designed to counter abusive tax practices, including the establishment of transfer pricing units.
They called on regional and international organizations to scale up their support to African countries in enhancing transfer-pricing capacity and designing and implementing tax treaties.

3.
Recognizing that abusive tax practices, tax evasion, and trade-based money laundering cut across a wide range of policy areas, participants committed to put in place relevant legislations to facilitate the development and implementation of a holistic approach to regional co-operation in the area of exchange of tax and IFFs-related information; and the development of policy responses between all agencies involved in combatting IFFs, including tax administrations, financial intelligence units, customs authorities, central banks, criminal justice and law enforcement agencies both at the national and regional levels.
4.

Participants called on parliaments and the executives in African countries to ensure that all agencies engaged in combatting IFFs, including abusive tax practices, tax evasion, money laundering and corruption have sufficient independence and resources to both carry out their existing functions and undertake the effective development and implementation of tegislative and operational responses to identified gaps and weaknesses.

5.
5.

Recognizing that the timely and efficient exchange of information is crucial, particularly in the area of transfer pricing, participants committed to putting in place relevant legislations and support advocacy to facilitate building and strengthening practical mechanisms that will facilitate better co-ordination, collaboration, and information exchange between domestic agencies, their regional counterparts, and relevant international organizations.

6.
Participants agreed to collaborate with their respective executive arm of governments to ensure that there are clear and effective channels for competent authorities to access and share trade data and relevant financial information on a timely basis, consistent with domestic privacy and data protection laws; and to encourage establishment/conclusion of mutual TlPage assistance agreements between customs agencies in other jurisdictions to facilitate the exchange of export and import data in order to identify trade anomalies that may point to the existence of abusive tax practices.
7.

Participants committed to increase financial transparency through collection and verification of beneficial ownership information, including through the establishment of centralized registries, which should be based on "open data" in line with the International Open Data Charter.
In this regard, participants agreed to ensure that appropriate legislations are put in place to facilitate the timely disclosure to competent authorities of adequate, accurate, and current beneficial ownership information for, at a minimum, sectors identified as being at risk for transfer pricing abuse.

Participants therefore: 8.


Acknowledged the utility of the forum in convening parliamentarians, policymakers, and experts and practitioners from government, industry, civil society and international organizations.

9.

Noted the value of the African Development Bank's convening power in providing a platform for collaborative dialogue and networking in the fight against IFFs and abusive tax practices, and agreed that the Banks efforts in this regard should be sustained.
10 Called on African governments to implement a "whole-of-government" approach enabling effective cooperation and exchange of information between all agencies involved in combatting IFFs, including financial intelligence units, anti-corruption agencies, central banks, tax administrations, customs authorities, criminal justice and law enforcement agencies.
11 Called on regional and international organizations, including the African Union and the African Development Bank to encourage and support further research on relevant issues relating to IFFs, including, for instance, trade- based money laundering and to assist in building the capacities of African countries' parliaments in this area.

12.
Called on regional African-based institutions including the African Union, African Development Bank, African Tax Administration Forum, the FATF-Style Regional Bodies such as ESAAMLG, GABAC, GIABA, and MENAFATF, as well as, the Asset Recovery Inter-Agency Network for Eastern Africa (ARIN-EA), Asset Recovery Inter-Agency Network for West Africa (ARIN-WA), and the Asset Recovery Inter-Agency Network for Southern Africa (ARIN-SA) to provide practical mechanisms for shared collaboration and exchange of experiences, guidance, and identification of best practices, including better co-ordination of their actions.
SlPage 13 The participants thanked the African Development Bank for the utility and relevance of the workshop, the efficiency of its organizational arrangements, and for the hospitality shown to the participants.

SIGNED t- MP-Budadiri East Aidah Nabayiga- MP- Kalangala district 24h July 2OI8 9lPage