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Tax-related illicit financial flows and human rights

Juan Pablo Bohoslavsky (United Nations, Viedma, Argentina)

Journal of Financial Crime

ISSN: 1359-0790

Article publication date: 2 July 2018

715

Abstract

Purpose

This paper aims to discuss the tax-related illicit financial flows from a human rights perspective. It argues that curbing illicit financial flows, and specifically tax abuse, is essential not only for realizing human rights but also for achieving the sustainable development goals. It provides definitions of tax evasion and avoidance, as well as estimations of illicit financial flows. It studies the tax abuse implications for human rights and sustainable development, as well as the obligations in the field of human rights and tax abuse. It also critically assesses the recent international initiatives aim at curbing illicit financial flows. It concludes with a set of recommendations on how to curb illicit financial flows.

Design/methodology/approach

This paper combines economic, legal and policy perspectives to study the multidimensional, complex and global problem of illicit financial flows. It not only proposes an explanation of the volume, roots and economic, social and human rights implications of illicit financial flows but it also proposes reforms that states and other stakeholders need to implement in order to curb this phenomenon.

Findings

Combating tax abuse and illicit financial flows more broadly, is essential to make better progress in realizing international human rights obligations. The inclusion of a specific target to reduce illicit financial flows under the sustainable development goals makes clear that curbing such flows is also essential for creating an enabling environment for sustainable development. While we should applaud that reducing illicit financial flows is mentioned in one of the targets of the sustainable development goals, the target remains broad and vague. Specific measures to operationalize this target are needed to ensure that progress is achieved and that such progress can be tracked and measured. The author presents recommendations for discussion. To promote accountability, the recommendations are addressed to specific stakeholders.

Originality/value

This paper tries to contribute to improve our knowledge and understanding of illicit financial flows and tax abuse more specifically at global level and their implications for human rights, to make the need for change more compelling, as well as to stimulate the debate around reforms that need to be implemented to curb illicit financial flows.

Keywords

Acknowledgements

This article is based on the report the author wrote as UN Independent Expert on Foreign Debt on Human Rights presented to the UN Human Rights Council on 7 March, 2016. The report, dated 15 January 2016, has been published as UN Doc. No. A/HRC/31/61A/HRC/28/59 and is also available in electronic format in Arabic, Chinese, French, Spanish and Russian. The author wishes to extend his gratitude to Tim Engelhardt, Mariannick Koffi and Gunnar Theissen from the Office of the UN High Commissioner for Human Rights for their dedication during their research and editorial work while writing the report, and Esther Shubert for having prepared a background research paper for the report. In New Haven, Connecticut, on 30 October 2015, the author participated in an expert meeting to discuss this study organized in collaboration with the Yale University Global Justice Programme and the organization Global Financial Integrity. The author thanks all participants for their feedback and in particular Thomas Pogge for his generous support. Some of the arguments, findings and recommendations presented in this article were subsequently discussed by the author in concrete country missions (see reports on Panama (A/HRC/37/5/Add.2), Switzerland (A/HRC/37/54/Add.3) and Tunisia (A/HRC/37/54/Add.1), all presented to the United Nations Human Rights Council in February 2018, which are available at www.ohchr.org/EN/Issues/Development/IEDebt/Pages/IEDebtIndex.aspx)

Citation

Bohoslavsky, J.P. (2018), "Tax-related illicit financial flows and human rights", Journal of Financial Crime, Vol. 25 No. 3, pp. 750-769. https://doi.org/10.1108/JFC-04-2017-0029

Publisher

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Emerald Publishing Limited

Copyright © 2018, Emerald Publishing Limited

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