Committee on Development Ordinary meeting
Legend
Transcript markers
- text Sentence being played
- text Search result
- text Intervention cited by the link you opened
Click a sentence to play the video from that moment. Select text to quote it with the speaker, timestamp and link.
More options
Offset
Transcript offset
Export
Replay
Versions of this video
Transcripts may differ slightly from one version to another.
DEVE European Parliament
Follow its sittings
Cecilia Strada
Dobbiamo illuminare con la luce del diritto il buco nero dell'impunità e lo dobbiamo alle vittime innocenti di queste violazioni, cioè la popolazione civile. I civili. Gli attacchi alle infrastrutture, le uccisioni di civili e operatori umanitari, compreso il personale delle Nazioni Unite, sono aumentati vertiginosamente. Ma la novità gravissima rispetto al passato è che oggi i principali autori di queste atrocità sono attori statali. Attaccare gli operatori, così come bloccare gli aiuti umanitari, sono crimini di guerra e come tali esigono accountability.
L'Unione Europea deve proteggere lo spazio umanitario, finanziare programmi adeguati in tal senso, altrettanto adeguati e ambiziosi devono essere i finanziamenti per la cooperazione allo sviluppo nella prossima programmazione finanziaria. Obiettivi chiari e misurabili, procedure di finanziamento semplificate, flessibili e prevedibili, sostegno attivo alle organizzazioni della società civile che lavorano sul campo. L'obiettivo deve essere sempre quello che ci ricordano i trattati: la riduzione e nel lungo periodo l'eliminazione della povertà. Spero che rimanga la nostra bussola negli anni a venire. Infine, anche e soprattutto da un punto di vista umanitario, dobbiamo riconoscere quanto l'attuazione dei trattati internazionali sul disarmo abbiano svolto un ruolo chiave nella definizione di un multilateralismo efficace e nel mantenimento della pace e della sicurezza internazionali.
E l'Unione infatti sostiene con forza l'universalizzazione di questi trattati, un impegno concreto per la sicurezza comune. Per questo fa specie che alcuni Stati membri abbiano deciso di ritirarsi da tali trattati, in particolare dalla Convenzione di Ottawa e dalla Convenzione di Oslo che vietano l'impiego, la produzione, lo stoccaggio e il trasferimento di mine anti-persona e munizioni a grappolo. È una scelta grave e miope che io condanno vista la natura indiscriminata di queste armi. Invito pertanto la Commissione e il Consiglio a chiedere agli Stati membri di ripensarci e rispettare i loro obblighi in virtù del diritto internazionale ed europeo. Ringrazio fin d'ora il segretariato, tutto il nostro staff e i relatori ombra a cui assicuro da parte mia la massima apertura e cooperazione nei lavori che seguiranno.
Grazie.
Barry Andrews
Thank you Cecilia, appreciated. And now speaking for the EPP is MEP Mazylis. Please, you have the floor.
Liudas Mažylis
Thank you chair. Today I will deliver this speech on behalf of my colleague Niels Geuking. First I would like to thank our rapporteur Cecilia Strada for presenting this first draft. It provides a solid basis for our discussions and there is certainly a lot we can work with.
I particularly welcome the focus on how Europe can remain a credible and reliable partner in a changing international environment. At a time when the rules-based international order is increasingly under pressure, development policy has an important role to play in strengthening it. In a world of growing geopolitical competition, Europe cannot afford to withdraw from its international partnerships. If we leave political and economic space to others, they for sure will fill it. This is why our development cooperation must be both values-based and strategic.
Our partners in Africa, Latin America and Asia are not simply recipients of European assistance, they are essential partners in creating economic opportunities, strengthening food and energy security and managing migration together. Development cooperation should help address the root causes of irregular migration, support host communities and create economic perspectives in countries of origin. At the same time, our partnerships must include cooperation on migration management, return and sustainable reintegration. This is part of a comprehensive partnership based on shared interests and mutual responsibility. And these partnerships must deliver results.
More spending alone is not a strategy. We need clear objectives, transparency and measurable impact, from jobs and education to stronger local economies and institutions. Finally, defending multilateralism does not mean defending the status quo. International institutions must become more effective and respond to today's geopolitical realities. And international law must be applied consistently rather than through politically selective lists of individual conflicts.
Our goal should be clear: a Europe that defends international law and its own interests while remaining a strong and reliable partner in the world. Thank you.
Barry Andrews
Thank you, MEP Mazylis, and now speaking on behalf of the S&D is MEP Bullmann, Udo, you have the floor.
Udo Bullmann
Thank you, Chair, and thanks, Cecilia, for this interesting and important report. Allow me to not only to praise your work and to underscore the necessity of your arguments, but also to point to a methodological element in our conversation, in the conversation of development people with neighboring policy areas and neighboring policy actors. We are living in days where a whole lot of new requirements are brought into the development discourse. Honorable colleague from the PPE just mentioned on behalf of honorable Geuking migration as an issue. So what can development do is the request of these days to somehow fix the problems concerning migration.
If we listen to our industry people, they say, come on, we need these minerals, so what can development do to organize the minerals that we need for the next technological generation? And if we listen to our foreign affairs colleagues, they would say, come on, we are in a troubled situation in geopolitics, what can development... So in these days, we understand an overload. Development gets into the focus of many, many people that have not been thinking about it any earlier. But we are in the midst of a political debate, a geostrategic political debate, but we are not equipped appropriately to give the answer.
So there is a systematic overload.
What Cecilia is doing is the other way around. She comes from the idea of sustainable development and asks the others, what can you do to allow for a decent development for people all over the globe? And this is exactly the right approach. I think it's exactly the right approach because then we can ask questions. And whenever we go back and ask questions, we do not receive answers.
So the permanent question, how can trade, for instance, hinder trade agreements, the wars in Africa? Do we talk to the Arab states when we are negotiating with the Emirates about trade agreements, that they perhaps could stop the weapon delivery into the Sudan? Do we stop the permanent influence from foreign forces in the areas where we build up with development money positive structures that are permanently destroyed by foreign military and economic interest? We never get an answer once we are talking to our neighboring policy fields. And here, to put in the center of the observation that the stabilization of the international law, the stabilization of the international multilateral order is of the essence if we would like to achieve anything positive is exactly the right way, the right discussion.
Thank you very much.
Barry Andrews
Very good. Thank you, Udo. And I will now just read some comments from the Renew shadow for this file, which is Abir Al-Sahlani. And Abir would like me to read out the following. From our DEVE perspective, we agree that the European Union must take a strong, clear, and coherent role in a rapidly changing global environment.
We are facing increasing challenges in our role and influence as a global actor. Our leadership is being tested by a vacuum of global funding cuts and open attacks on international institutions such as the UN, the ICJ, and ICC. This also means that we need more action, such as activating the blocking statute as a way to reaffirm our support for such institutions and reinstate our credibility on the global stage. International law must be strengthened and followed to secure human rights as a fundamental pillar of the SDGs and a core principle of development itself. We look forward to working closely with the rapporteur and her team and wish best of luck.
And I just want to add a few comments of my own, Cecilia, if I may. And I would just want to say that I wholeheartedly agree with your analysis and indeed the comments on behalf of MEP Goerens, that we do need clear objectives. And when we have a Global Europe instrument that has so much flexibility that there are no clear objectives or targets, then we need to adjust that very, very carefully. We have to make sure that we reinstate the targets that we have in the NDICI. We need to make sure that we underline the importance of multilateralism in the Global Europe instrument.
So it's one thing having a strategy, but it's another thing having the resources and a budget. So I think that we must reflect these sentiments that we heard this morning in the way that we approach the MFF, the Global Europe instrument, including the humanitarian budget. So with that, Cecilia, we'll hand back to you if you'd like to make some finishing comments in response to what you've heard. Oh, I beg your pardon. Yes.
Do you want to go to the Commission first? I think maybe. Yes. Sorry, Cecilia, just one moment. May I give the floor to Ms. Carolina Lasso Navarro, who is Deputy Head of Unit for the Humanitarian Aid Policies and International Law in the European Commission DG ECHO.
Carolina, you're welcome. You have the floor for three minutes.
Carolina Laso Navarro
Thank you very much. I just want to say from the side of the Commission that we welcome very much the recognition in the draft opinion of the alarming international law landscape with widespread violations affecting civilians and humanitarian workers and increasing restrictions to humanitarian access. These do not impact only humanitarian aid, but also challenge credibility of the international legal and multilateral order. The Commission also welcomes the reference to the recently adopted joint communication on humanitarian aid. As indicated in the communication, the current context requires the EU to better leverage its humanitarian, political, economic, security and diplomatic instruments in support of IHL, including trade policy that was also mentioned before and the protection of civilians.
As such, the Commission together with External Action Service will boost the capacities for coordinated action on EU humanitarian diplomacy. The Commission and the High Representative of Foreign Affairs will continue to speak out and condemn violations consistently in all context. The Commission will also reinforce donor coordination on humanitarian access. Moreover, it will continue to fund data collection on and analysis of violations of IHL in order to inform humanitarian diplomacy and advocacy. Finally, I also want to highlight what has been mentioned before by the rapporteur about the strengthen, the need to strengthen the protection and security of humanitarian workers given the alarming trends.
In this respect, the Commission will continue to support the care of victims and survivors of attacks on humanitarian personnel and I and will turn the Protect Aid Workers program and mechanism into a global program to further strengthen its reach. The Commission will also organize, as you may know, on the 15th and 16th of October a conference on this topic. Thanks very much.
Barry Andrews
And we look forward to that. Thank you, Carolina. And next I give the floor to Esther Orsini-Rosenberg, who is Deputy Head of Division for Multilateral Relations in the EEAS. Esther, you're welcome, you have the floor for three minutes.
Ester Orsini-Rosenberg
Thank you, Chair, Rapporteur Estrada. Thank you for DEVE's contribution and the timely work on this report. One general point as we reflect on the outcomes of the 81st General Assembly high-level week last week in New York. We are really at a critical juncture for multilateralism. International law is increasingly challenged, geopolitical rivalries are deepening and the fragmentation of universal norms threaten global stability.
We agree that defending effective multilateralism that delivers is a matter of principle and strategic European interest. It is the only realistic way to address the problems of today, as President Costa said last week at the General Assembly. Multilateralism must be equipped to address the defining challenges of today: peace, climate change, economic insecurity and artificial intelligence. And the UN therefore must be remain operational, effective, financially disciplined and fit for purpose. The UN 80 reform initiative is a unique opportunity to achieve this, but for us it is clear we need to cut fragmentation and not ambition.
We share the emphasis on the amendments to the report, which resonate with the work of the EAS, and I would like to second also the comments made by DG ECHO. First, we welcome the amendments strengthening focus on humanitarian action and the importance of international humanitarian law and protection of principled humanitarian space. These priorities align closely with our ongoing efforts, in particular in light of the strategic approach to humanitarian diplomacy presented in May by the Commission and the High Representative. Second, disarmament treaties are indeed the success story of multilateralism and the recognition that unregulated proliferation of certain weapons undermines IHL compliance and humanitarian delivery. Third, support for international courts, in particular the ICC and ICJ.
And we need to put delivery before process and make reform continuous.
We are strongly committed to upholding the Rome Statute and preserving the ICC's independence and integrity. The EU will continue to condemn attacks or threats against the court, elected officials, personnel and those cooperating with the court. And fourth, strengthening partnerships with the Global South is essential to this effort. While some disengage, the EU is strengthening partnerships across regions, building broader coalitions on shared priorities. We're committed to working closely with countries in the Global South, including to build more inclusive and resilient humanitarian responses, grounded in local needs, ownership and sustainable solutions.
To conclude, high-level week was a prime example of how the EU can coordinate outreach beyond traditional partners and confirmed the continued demand across regions for effective multilateral cooperation. It showed clearly that international law, IHL and accountability are core EU strengths, and we look forward to continued cooperation with you as your work progresses on this report. Thanks.
Barry Andrews
Thank you, Eszter, and there we give the floor finally to the head of unit in for sustainable development policy and global partnerships with the UN in DG INTPA, Mr. Mathieu Bousquet. Mathieu, you're welcome, you have the floor for two minutes.
Mathieu Bousquet
Thank you very much, and no comment on the draft opinion as such, I think the ECHO and EAS have already reacted. And indeed it's important we think to focus on the legal aspects at a time when the ICC is under unprecedented pressure and international humanitarian law is widely disregarded. Having said that, the report raises a much broader question with significant implications for our international partnerships, and this goes beyond legal consideration and crisis management. The multilateral system requires funding to be able to operate properly, but it is today under intense financial pressure. The US disengagement has left a political vacuum, and if the EU doesn't step up, others will.
So there's a direct link with the broader MFF discussions, and the Global Europe budget will also underpin our multilateral ambition. So the question, as the chair said, is do we want to invest in multilateralism, in its defense and its modernization? Three comments quickly on the report. First one, when we talk, when it talks about open strategic autonomy and partnerships in paragraph 14, we could expand on the fact that we're already doing part of that and say what we are already doing. Targeting the intersection of our interest, and last week's UN General Assembly high-level week confirmed that there's a strong demand for modernized partnership from our partners, and that also feeds in paragraph 5, for instance, and other parts of the report.
Second point, we should acknowledge perhaps more explicitly that many of the challenges we face are self-imposed as EU. And here I think of, for instance, of the crucial issue of elections, where our failure to coordinate as EU essentially puts us in a very weak position on the broader stage. On the FAO, important FAO election, leadership election coming up in a few months, there's currently three EU candidates, while the African Union has managed to rally beyond, behind a single one, and this is a recipe for failure.
So there's a need for a bit of introspection on how we coordinate internally. And third, this is a more semantic question, we continue to question the terminology of Global South, which we think feeds into the Chinese narrative and creates a static division between the West and the rest that doesn't reflect the complexity of today's world. It's a very vague concept based on no objective criteria, and essentially with the result that we have a group that will be led by China forever, notwithstanding levels of development or GDP. So we'd encourage, it's convenient, but we'd encourage the committee to think about other ways of defining our partners. Thanks.
Barry Andrews
Okay, very good. Food for thought from all of the institutions there. Cecilia, so maybe some concluding remarks if you don't mind.
Cecilia Strada
Grazie a tutti per questi commenti. Mi trovo molto d'accordo con tutti, anche con la Commissione. Il punto è che però alle parole dobbiamo fare seguire i fatti, perché se non seguono i fatti continuiamo ad alimentare una cultura dell'impunità. Se non riusciamo ad attivare il regolamento di blocco per proteggere la Corte Penale Internazionale, se togliamo gli Emirati Arabi Uniti dall'elenco dei paesi ad alto rischio riciclaggio quando continuano a essere il principale riciclatore dell'oro di contrabbando sudanese, quando non utilizziamo lo stesso standard con i crimini di guerra commessi da Putin e i crimini di guerra commessi da Netanyahu, perdiamo credibilità, una parola molto corretta che ha usato Abir Al-Sahlani. E noi invece dobbiamo ripristinare l'ordine internazionale basato sul diritto, e non solo per popolazioni lontane da noi che magari non incontreremo mai.
Lo dobbiamo ai nostri nipoti, perché in questo momento la scelta è fra la forza della legge o la legge della forza. Quindi non soltanto per chi è al di là del mare, ma per i nostri pronipoti europei deve essere un impegno che ci prendiamo tutti insieme e che portiamo avanti come prioritario. E ci lavoreremo. Grazie mille.
Barry Andrews
Excellent, thank you Cecilia. So the deadline for amendments is next Tuesday, the 6th of October at 18:00 hours, and the committee vote is scheduled for the 10th of November. So thank you Cecilia. We'll resume in two, three minutes with the next item on our agenda.
Okay, let's go. This is item five. We are jointly with the subcommittee on tax matters. And I welcome my co-chair Pasquale Tridico, who is the chair of the FISC committee. We will also be moderated by our DEVE colleague Udo Bullmann.
So, this is the joint meeting on taxation and the achievement of the SDGs and the link between these two. This issue was widely articulated at the Seville conference on financing for development, where the focus was on enhancing national resource mobilization in order to tackle poverty and inequality, in particular in low and middle income countries. As we all know, ODA is shrinking and at the same time debt costs are rising and rising even faster in least developed countries. So it's even more important that we focus on the fairness of taxation systems and fiscal space in order to make sure that we continue on a trajectory towards achieving Agenda 2030. The EU already plays an important role in supporting partner countries' efforts to strengthen tax systems and combating illicit financial flows, money laundering and tax evasion.
These are important areas of cooperation under our development cooperation portfolio, and so it's a timely moment for us to discuss the effectiveness of our EU actions right now, especially as we prepare the Global Europe instrument. So we're also supporting efforts to enhance international rules on corporate taxation beyond the development agenda, and hence we have the subcommittee on tax matters who will give us the benefit of their expertise. Before handing over to my colleague, let me welcome our three experts who bring very diverse backgrounds to the debate. We have Maria José Garde, who is head of secretariat of the Global Forum on Transparency and Exchange of Information for Tax Purposes at the OECD. We have Mary Baine, who is the executive secretary of the African Tax Administration Forum and connected online this morning from South Africa.
And we have the pleasure of the company of Conor O'Neill, head of advocacy and policy at Christian Aid in Ireland. So we want to welcome all of those guests. My colleague Udo Bullmann, who initiated this hearing in the DEVE committee, will moderate the debate, but for the moment let me hand over to Pasquale for the chair of the subcommittee on tax matters for his opening remarks.
Pasquale Tridico
Thank you, Barry, thank you Mr. Chair for your introduction. And I would also to welcome you today for this joint hearing on promoting fair taxation, combating illicit financial flow and fighting inequality in developing country. Every year governments around the world lose revenue worth billion of euros due to tax evasion and tax avoidance by wealthy individuals or big international companies.
developing countries in securing their much needed revenue. The work of OECD and the Global Forum, and today we have Maria Jose Garde, thank you for being here, deserves special mention for developing standards on transparency and the exchange of information supporting countries worldwide in implementing these standards. The European Parliament has been strongly supportive of the OECD work on the so-called BEPS, base erosion profit shifting, and more recently the Pillar Two reform which introduced a global minimum effective tax rate on corporate profits, despite all the recent changes which occurred due to the request of the US new US administration, so-called side-by-side. We are also following with interest the more recent development at the level of the United Nations, where developing countries have launched the initiative to work on framework convention on international tax cooperation. In this context, we as FISC are going for a mission to Nairobi to attend the next round of negotiation of this next framework.
Against this background, I look forward to hearing the presentation of our expert and the following discussion on how we can further improve the international tax framework to promote fair taxation and combat illicit financial flow with a view to the specific concern of developing countries. Let me now hand over to Mr. Bullmann, Udo, the floor is yours.
Udo Bullmann
Thank you very much, dear chairs, warm welcome to our special guest today and let me also thank our excellent secretariats who have prepared a wonderful hearing and I'm totally sure that the results of our conversations this morning will feed into our further work in this committee and beyond. What is at stake, dear friends, dear colleagues? We have to witness in the world economy, whether it's growing or not growing or hugely growing or not too much growing, inequality is rising. And inequality is poisoning our societies in the East and the West and in the North and in the South especially. And the second argument we need to look at is we have shortages of resources that we transfer to our collaboration and everybody talks about the mobilization of domestic resources.
This is an important issue, but on the other hand we can see, take for example Africa, that some 90 billion illicit outflows go out of the continent each year, more money than is invested in Africa from the outside. So what is wrong with that and what can we do about it? Tax policy, domestic tax policy in our partner countries, international tax policy is at the core of this question. And I would love to give the floor now to Ms. Garde for some seven minutes, afterwards to Ms. Bane for seven minutes, and to Mr. O'Neill for seven minutes, and then we enter into Q&A as it is foreseen. Please, keen to listening to you, Maria.
Maria José Garde
Yeah, thank you very much, chairs, moderators, honorable members. First let me thank you for the invitation to the Global Forum to participate in this very interesting session. When we talk about promoting fair taxation or combating tax evasion or inequalities, often attention turns to tax rules, talking about tax rates or policy debates. Today I would like to focus on something that more fundamental in our globalized economies and a central pillar of the international tax architecture, which is tax transparency and exchange of information. Three messages I would like to share with you today.
First, countries need access to reliable information if they are to enforce their own talks or tax laws effectively. When the economy is purely domestic, tax authorities have direct access to the taxpayer information in order to apply the tax system because they have all the information in the same country. However, assets, investment and financial activities routinely cross borders. Without access to information held abroad, tax authorities are often trying to enforce domestic laws with only part of the picture. Over the past 15 years, the international tax community has established international standards that enable tax authorities to obtain information and exchange it across borders while respecting confidentiality, legal safeguards and data protection requirements.
As a result, tax administrations today have access to information on an scale that would have been difficult to imagine a generation ago. As an example, in 2024 alone, information on more than 171 million financial accounts with a value exceeding 13 trillions of euros was exchanged automatically under the CRS or automatic exchange of information framework. This information provides tax administration with a powerful detection tool, helping them identify previously undisclosed offshore assets, target compliance risks and strength tax enforcement. So transparency and information exchange, the international exchange of information works and the numbers show that it does. Now, the challenge today is ensuring that all countries can put it to practical use.
With 174 member jurisdictions, the Global Forum is the world's largest body dedicated to the implementation of international standards of tax transparency and exchange of information. The Global Forum does not determine tax policy or advise governments on their choices of tax system, no. Our role is a little bit different. Our role is to ensure that jurisdictions can access and exchange the information needed to administer and enforce their laws. We do so by conducting peer review evaluations and providing capacity building to assist and support countries so they can benefit of that information.
The transformation that we has seen has been remarkable. Since 2009, our members have identified at least 135 billion of euros in additional revenues through tax transparency and exchange of information. And more than 47.5 billion of euros of that has been identified by developing countries, demonstrating that the benefits extend well beyond the largest economies. But success also brings new challenge. And this is my second message, is the information alone does not increase compliance or raise revenues.
Capacity is key, is what enables tax administrations to turn information into concrete results by identifying risk, detecting non-compliance and taking effective action. This is why capacity building sits at the heart of our work. In 2025 alone, the Global Forum Secretariat provided bilateral technical assistance to 111 jurisdictions and supported close to 10,000 tax officials through training, guidance and practical tools.
Let me give you two short examples demonstrating how capacity building can translate directly into stronger domestic resource mobilization. Uganda joined the Global Forum in 2012 with almost no experience in exchange of information. Since then, Uganda has benefited from a comprehensive support from the Global Forum that has helped them to build a strong exchange of information framework with a network of 143 exchange of information partners. These efforts helped Uganda identify more than 136 million of euros in additional revenues and successfully launch automatic exchange in 2025. In also Uganda is committed to first exchanges under the crypto asset reporting framework in 2027.
Uganda has developed a strong expertise in the area of exchange of information, recognized not only in Africa but globally, sharing their experience with some other African tax administration. Other example is Peru. Peru joined the Global Forum in 2014 and since then sustained support has enabled exchange of information to become an integral part of tax compliance activities, contributing to 133 millions of euros in additional tax revenues. Since commencing automatic exchanges in 2020, Peru has increasingly integrated international tax information into its compliance strategy, strengthening risk assessment, audits and tax recovery and help identify 26 billion of euros in assets held abroad in 2025. So looking ahead, this work becomes even more important.
New transparency initiatives, including the crypto asset reporting framework and updates of the common reporting standard, create significant opportunities for all tax administration. Without the capacity, valuable information remains underused and the potential benefits of transparency are left unrealized. So let me conclude with my third message. The foundation of global tax transparency are now firmly in place. The task before us is to ensure that every jurisdiction can participate fully and turn transparency into meaningful results.
The capacity need remains significant and the opportunities even greater. With continued support, more developing countries can strengthen their tax administration, implement international transparency standard and mobilize the domestic resources needed to support their own development priorities. Continued investment in capacity building is therefore essential if countries are to translate transparency into stronger compliance, additional revenue and stronger institutions. On behalf of the Global Forum Secretariat, I would like to thank the European Union and its member states for their long-standing partnership and support for the Global Forum's capacity building program.
And that no jurisdiction is left behind. Thank you very much. I look forward for your questions.
Udo Bullmann
Thank you so much, Maria. And it's now my pleasure to welcome Mary Baine, as I understand connected from South Africa. Do we have confirmation on... Hi, we see you, we hear you. Same for you, welcome.
Mary Baine
Thank you very much. And Chair, honorable members, fellow panelists, good morning. Thank you so much for the kind invitation to the African Tax Administration Forum, which brings together the tax administrations of 45 African countries with one practical mandate to help our members build tax systems that fund development and that citizens regard as fair. Let me set out the reality that frames everything that I will say this morning in five figures, drawing on our own African Tax Outlook publication and the African Development Bank's latest African Economic Outlook. On tax revenue, around 16% of GDP across Africa is a reality, which is roughly half the OECD average.
On debt, 35% of government revenue went into servicing external debt in 2024, up from under a quarter in 2017. On health, in a growing number of our members, interest payments alone now exceed what government spends on health. Illicit financial flows are, like in the opening of the Chair, indeed 90, according to 90 billion US dollars goes, is lost in illicit financial flows every year, and a further 275 billion a year in profit shifting by multinationals. The last figure that I want to share is the gap and the prize. An annual development financing gap of more than 1.3 trillion dollars against 469 billion a year that the bank estimates could be obtained from stronger tax and non-tax revenue.
So, Chair, members of the committees, fair taxation is therefore not an abstract principle for Africa. It is the difference between a state that can deliver for its people and one that cannot. I was asked to give the African perspective and give an assessment of the UN process and the OECD framework. I will offer three perspectives, Chair, and close with three recommendations to the EU. My first perspective is that the rules still allocate too little to where value is created.
The core fairness question in international tax is now is how taxing rights are shared between residence and source jurisdictions. Many African countries remain bound by treaties negotiated decades ago that hand taxing rights to the investor's home country, even when the activity, the customers, and the value are in Africa. ATAF's response has been technical rather than rhetorical. Our revised model double taxation agreement gives members a negotiating text that protects source taxation while still eliminating double taxation, and we hope more members can take this on board. On the OECD G20 inclusive framework, let me be clear here, Chair.
We value that partnership, but strongly believe the benefits could be better. ATAF has participated since inception. The BEPS measures and the global minimum tax have given our members very useful tools, and ATAF is helping them adapt domestic minimum top-up taxes so that the revenue is collected in Africa rather than ceded to headquarter jurisdictions. I'm afraid that is where the good news ends, because the inclusive framework did not resolve the issue of the allocation of taxing rights.
Pillar one, like we all know, which was to reallocate profits to market jurisdictions, has not materialized, and the rules that did emerge are hardest to administer for those with least capacity. That is our candid assessment, and we offer it in a spirit of partnership. My second perspective is that the UN Framework Convention is Africa's opportunity, and it's also Europe's opportunity. This is why the UN Framework Convention matters so much to our members. It was driven by the Africa Group, and for the first time, every state sits at the table with an equal voice.
The negotiations are halfway, and the next session will be in Nairobi in December. It is great to see that the EU FISC subcommittee will send a delegation, and we would warmly welcome its contribution, not only in assessing the impact on the EU framework, but in helping to building the outcome. Three points on the substance. One, on complementarity, which is mentioned in this session. Africa welcomes it, and I would like to share how we understand it.
Complementarity means the convention draws on the work of other fora, including the inclusive framework, and adapts or sets it aside on its merits, case by case. It should not mean that the UN process simply inherits outcomes that many of its members had no point in shaping. Countries should remain free to choose the OECD standard or the UN standard according to their own circumstances, and we believe that freedom is what a fair system should protect. Second, the first protocol on income from services delivered across borders, including automated digital services, is Africa's priority. Highly digitalized businesses earn substantial income from our markets with no taxable presence.
Europe shares that problem, and so a common solution serves everyone. Third, freedom to choose comes with a duty to honor. Once a state signs the convention or a protocol, it is it should be bound to implement it in good faith and to discharge its obligations in full. Africa holds itself to that standard, and we ask the same of all our partners. A framework that is signed but not honored would repeat the disappointments of the past.
My third perspective: what are we doing to build fairness at home? International rules matter, but fairness is experienced at home. Three practical examples from African tax administrations with ATAF support. On wealth, ATAF's study has identified more than 18,000 high-net-worth individuals across three countries, alongside with alongside wide compliance gaps and thin capacity to enforce the taxes already on the statute book. We hope that the guide that we have developed will continue to help members to build dedicated units and national strategies, giving practical effect to the G20 commitment that this parliament welcomed.
On transparency, like Maria Jose has said, a lot of work has been done, and we partner with the Global Forum, and we welcome this partnership. Exchange of information only reduces inequality if African administrations can actually use the data. ATAF, Zambia, and the World Bank are in the process of building a solution that will enable small administrations acquire it and to make sure that they are no longer priced out. On results, ATAF's technical assistance, including direct audit support on complex cases, has helped members raise assessments of 6.5 billion US dollars and collect around 3 billion over the past decade. The partner support behind that work has been repaid many times over in revenue for our members, and the demand for it keeps growing, results increased resources requirements for ATAF.
...of Africa that helps countries to measure and close their own gaps. On partnership, this could not have been done alone, and the European Union's multi-donor action on illicit financial flows, implemented by GIZ, has anchored much of ATAF's work on tax-related IFFs, together with our other partners like Germany, Finland, Denmark, the Netherlands, Ireland, and Norway, and Switzerland. Beyond this Union, this has sustained our work, and this partnership is the reason our results exist. Continuing and strengthening this is the surest way to sustain them. So my three quick recommendations: one, on Global Europe.
In Seville, development partners pledged to double support for domestic revenue mobilization by 2030. When this Parliament votes on its negotiating mandate on 19th October, I would respectfully ask that this commitment be made concrete: a predictable, multi-year, and identifiable allocation for domestic revenue mobilization, with a deliberate share channeled through African regional institutions rather than only through bilateral projects, because the work we do supports the 45 members at once. We believe this is among the most effective uses of development resources available to the Union. Second, on the UN process: come to Nairobi as a partner in building the outcome, support a workable services protocol, and allow complementarity to mean that the convention weighs the work of other fora on its merits rather than deferring to them. Third, on policy coherence: the Global Gateway resolution rightly expects partners to meet international standards on illicit finance.
We would respectfully ask that the same standard guides Europe's own footprint in Africa: treaties that reflect a fair allocation of taxing rights, exchange of information that is reciprocal and usable, and beneficial ownership transparency on both sides. As I close, Chair, Africa is not asking for exceptions to the rules. We are asking for rules that are fair, for a seat alongside others in shaping them, for the freedom to choose what serves our people, for the discipline to honor what we sign, and for partners who invest in our capacity to apply it. ATAF stands ready to work with the European Union, its member states, and our development partners to turn these objectives into revenue and revenue into development. I thank you, Chair.
Udo Bullmann
Thank you very much, Mary Baine. Allow me for two technical remarks before I pass on the floor to Conor O'Neill, our third speaker, who is with us today on the podium. Please speak, speakers, all a bit slower, because our interpreters are doing as always an excellent job, but they need some space for the translation work, and if you are speeding too much, then it's getting more and more difficult. And the second thing: Mary was being well-informed about the ongoings in the European institutions, as I realized, and had additionally a whole lot of good proposals. Same with Maria next to me.
We saw that Conor already had submitted his introductory remarks to this discussion to the Secretariat. Please help us if you like to transmit your inputs to the Secretariat, then it's much easier for us to follow up and to make use of your excellent proposals. Conor, you have the floor for seven minutes.
Conor O'Neill
Thank you. Hello, everybody. First off, I would just like to sincerely thank the members and the committee chairs for the opportunity to speak today, and particularly to welcome the fact that this hearing is being hosted jointly by both DEVE and FISC. As a representative of an international aid and development organization that has worked for several decades focused on issues of economic justice, including debt, trade, and tax policy, this joint context in particular is hugely important.
Connor O'Neill
I think it is a recognition of the fact that tax policy is critical for international development. And a key principle of our work and in the development sector more broadly, I would say, is that we must not only respond to acute cases of humanitarian need, poverty and inequality, but also seek to address their underlying symptoms and root causes. This is exactly why we invest in research on tax avoidance, because it fundamentally shapes states' capacity to raise revenue, to fund essential public services and consequently to fulfill their human rights obligations. Without fair and functioning taxation systems, efforts to deliver adequate housing, healthcare and education, and indeed to tackle poverty and inequality meaningfully, are badly undermined. But crucially, these impacts are just no longer limited neatly within national boundaries.
And in the modern global economy in which we live, wealthy individuals and multinational corporations continue to exploit divergent national tax laws and a climate of competition rather than cooperation between states to dramatically reduce their overall tax bills. Corporate profits are shifted across borders into low or no tax jurisdictions, both inside and outside of the European Union, sheltering billions every year. This erodes tax bases, national budgets and ultimately public trust. I think a few key elements are important to frame today's discussion. Firstly, for the context, despite significant efforts at reform and some very notable advances made over the past decade, corporate profit shifting continues at a very significant scale.
Recent academic research, including from the EU Tax Observatory, has estimated that approximately one trillion US dollars in corporate profits are shifted into low or no tax jurisdictions per year, leading to annual losses of between 267 and 347 billion US dollars. That is about 8 to 10% of all corporate tax revenues collected globally. For context, this revenue alone would be sufficient to meet the 300 billion US dollar climate finance target agreed at COP29 in Baku, but still hugely under-delivered. Ultimately, recent reform initiatives have managed to stem the huge explosion in corporate profit shifting witnessed since the 1970s, but they haven't yet been sufficient to end it. They have not also comprehensively addressed the fundamental asymmetries and injustices underpinning these transfers of revenue and wealth, which often flow from south to north.
Second, while the EU as a whole experiences significant aggregate losses due to these practices, individual European countries continue to play an oversized role in the global corporate profit shifting landscape. While it is challenging to disaggregate country-specific estimates, recent research also suggests that in 2023, the world's largest recipients of corporate shifted profit was Ireland, followed by Netherlands, Singapore, Switzerland and Luxembourg. Estimates vary depending on methodological differences, but a consistent finding is that European countries play a central role in facilitating avoidance. Thirdly, this is not, despite how it's often discussed, just a question of competition between larger, more powerful economies. These practices are particularly harmful for lower income countries, which tend to be more reliant on corporate income tax, and most global estimates find that a greater proportion of profits are shifted out of lower middle and lower income countries.
Vital revenue is siphoned away, prolonging a reliance on aid, exacerbating inequality and keeping people trapped in poverty. In this sense, the policies set in national capitals across Europe, and indeed at EU, OECD and UN levels, have a very significant impact on development goals in the rest of the world. Fourth and lastly, let me give you a very concrete example. Across 2021 to 2023, we published detailed research which demonstrated how one of the world's largest pharmaceutical companies, Abbott Laboratories, had constructed a tax shelter which enabled it to legally avoid paying millions in tax on enormous profits generated through billions of dollars in sales for COVID-19, HIV, malaria and other disease tests at the height of the pandemic, including in lower income countries. This particular structure relies on the interplay of domestic tax law and policy in both Ireland and Malta to function.
And it has enabled the company to shift profits away not just from the US and France and Germany, but also countries like Ethiopia, Nepal and South Africa. The end result was an effective tax rate on nearly half a billion euro of related profits of not 15% set as the new global target, not 12.5% which is the headline statutory rate in Ireland, but just 4%. And that is just one case of one company using one particular tax structure that is in fact relied upon by many, many more. And it is replicated in different shapes and sizes right across the European Union. And it demonstrates how this culture of intense tax competition rather than cooperation between EU member states results in important revenue losses not just for the EU as a whole, but for countries in the global South where local communities and civil society organizations like ours are trying to pick up the pieces.
In response to these ongoing justice we would have two very specific asks for the, for the committee members and for the European Union. First, it's critically important to seek to advance the important work already undertaken at EU level, which has been very necessary, but as I said at the beginning, insufficient. In particular, the upcoming review of the EU's public country-by-country reporting directive offers an important opportunity to deliver a directive truly worthy of the name and address fundamental gaps in the legislation regarding company scope, data aggregation, information access and exemptions and carve-outs. But second and most importantly, and I want to really support Mary's intervention on this particular point, we must push for the EU and its member states to take a clear, supportive and constructive position in the negotiations on a UN framework convention on international tax cooperation, which has regrettably not been the case to date. The overwhelming and clear message from civil society organizations, tax justice networks and our partners in the global South, and crucially the vast majority of governments of the world as mandated at the UN General Assembly, is that the UN is the appropriate body to address the clear, persistent and unjust gaps in the current global tax architecture.
It provides for the first time an inclusive, transparent space in which all countries can participate on an equal footing in both design and implementation. Its terms of reference set by the UN General Assembly give it a unique and specific mandate to move beyond this current patchwork of national and regional agreements and instead to establish, and I quote, "an inclusive, fair, transparent, efficient, equitable and effective international tax system for sustainable development, which must take a holistic sustainable development perspective that covers in a balanced and integrated manner economic, social and environmental policy and be aligned with states' obligations under international human rights law."
Conor O'Neill
This mandate framing and objective is precisely why we believe that the UN process is so important, something that we would urge the EU and its member states to genuinely support, beginning in Nairobi at the end of this year and of course continuing in the final negotiation sessions in 2027. Thank you.
Udo Bullmann
Thank you so much, Connor. We had excellent reports from three excellent speakers. Let me share my impression for the discussion and then explain how we work it out. Well, the impression I have is that we hear excellent contributions from three excellent speakers who come from different institutional backgrounds, from different viewpoints and from different experiences. Everybody tries to solve a problem where we already see the successes of our single approaches, but not the solution of the problem.
We can identify the shortcomings, the successes as well as the shortcomings. And now the question is obviously how do we deal with the asymmetric power structures that hinder us from progress in the past and how can we develop strategies for a coherent approach of the multitude of actors of goodwill to have final, final is never, but really crucial solutions to a problem that is growing, growing, growing, growing and a pain in the life of the people all around the globe. So perhaps we could try to reflect kind of these questions in our discussion. I will first of all give the floor to the members in the room. I will go back to the chairs.
I will then invite the Commission. Thank you for being with us this morning. And then come back to our speakers here in the podium. Any wishes to taking the floor in the room? I see Löhre from the S&D, please.
Leire Pajín
Thank you, chair. Voy a hablar en español. Señor presidente, señor Greit-Baini, señor O'Neill. Quiero empezar diciendo que este debate es tremendamente oportuno. En este comité, en muchas ocasiones discutimos sobre los compromisos de financiación para el desarrollo, pero ¿de qué sirve la financiación para el desarrollo si la evasión fiscal, como se ha dicho aquí, y los flujos financieros ilícitos privan a millones de personas de recursos para hospitales, para escuelas, para servicios básicos?
Como también se ha dicho aquí, segùn todos los organismos internacionales, África, por ejemplo, pierde cerca de cien mil millones de dólares anuales en flujos financieros ilícitos, el triple de la ayuda bilateral de los países de la OCDE, lo que pone de manifiesto la dimensión de lo que estamos hablando. Por eso es muy importante reforzar los sistemas fiscales de los países para que puedan recaudar mejor y para que puedan también gestionar mejor esa recaudación. Pero también es fundamental la cooperación técnica. Y aquí quiero poner en valor algunos proyectos que...