Former president Mbek to chair high level talks on illicit financial flows

Abstract

The High Level Panel (HLP) on Illicit Financial Flows from Africa, established by the Economic Commission for Africa (ECA) and the African Union (AU) was inaugurated in February 2012 to address the debilitating problem of illicit financial outflows from Africa estimated at $50 billion a year. The Panel is chaired by President Mbeki, former president of South Africa, and composed of nine other distinguished personalities from within and outside Africa Illicit financial flows constitute, among others, undocumented commercial transactions and criminal activities characterized by over pricing, tax evasion and false declarations facilitated by some 60 international tax havens and secrecy jurisdictions that enable creating and operating of millions of disguised corporations, shell companies, anonymous trust accounts, and fake charitable foundations. Some of the effects of illicit financial outflows are the draining of foreign exchange reserves, reduced tax collection, canceling out of investment inflows and a worsening of poverty. Such outflows also undermine the rule of law, stifle trade and worsen macroeconomic conditions.