Global anti-graft court could level playing fields

The interconnected problems of tax evasion, illicit financial flows and corruption require a bold, co-ordinated international response. The proposed UN Tax Convention, combined with the establishment of an international anti-corruption court (IAAC), could represent a significant step forward in addressing these issues. By providing a global framework for fiscal justice and holding corrupt actors accountable, these initiatives could help nations – particularly in Africa – recover the billions lost annually to corruption and illicit financial flows. Prosper Maguchu, an assistant professor of law at the Vrije University in Amsterdam, notes the International Court of Justice, the UN’s judicial arm, has been the cornerstone of adjudicating international treaties and conventions. But its scope is limited, and nations can opt out of its jurisdiction, as seen with the UN Convention Against Corruption. ‘The IACC could emerge as a powerful force in combating corruption, illicit financial flows (IFFs) and tax evasion – issues that have stifled the economic potential of developing nations, particularly in Africa.’ In his Thought Leader column in the Mail & Guardian, Maguchu says the magnitude of IFFs in Africa is staggering. Estimates suggest that African nations lose between $50bn and $89bn annually to such flows. He says by establishing automatic information exchange, public country-by-country reporting and a global asset registry, the UN Tax Convention would significantly improve the ability of governments and international bodies to track wealth and ensure that corporations and individuals pay their fair share of taxes. ‘Such measures would also lay the groundwork for a shift toward unitary taxation, where multinational companies are taxed based on the economic activity they generate in each country, rather than where they declare their profits.’

Moving forward, Maguchu says an IACC could fill the gaps left by existing international legal frameworks, providing an independent body to prosecute corruption cases involving multinational corporations, high-net-worth individuals and state actors. ‘In doing so, it would hold these actors accountable for the economic harm they cause, particularly in developing countries. By focusing on tax-related corruption and illicit financial flows, the IACC could support the goals of the proposed UN Tax Convention. The court could help enforce international norms around beneficial ownership transparency and public country-by-country reporting. Furthermore, the IACC could serve as a crucial deterrent to corrupt practices, ensuring that those who misuse public funds or evade taxes are brought to justice.’ Maguchu argues corruption in Africa is a byproduct of greed and the exploitation of weak governance structures. ‘An international body like the IACC could help create a level playing field, ensuring that the same rules apply to everyone, whether they are a powerful multinational corporation or a high-net-worth individual with offshore accounts.’