Tax Justice Conference NAIROBI 12th -14th March 2019 Curbing Illicit Financial Flows from Africa Case of Rwanda Presentation by Alexis Nkurunziza Economic Governance Expert At the Center for Economic and Policy Priorities (CEPP) Tax Justice Conference NAIROBI 12th -14th March 2019

Presentation outline Understanding the Illicit Financial Flow The Impact of IFF on Developing Countries What to do on IFF? What Rwanda has managed to put in place to fight corruption and curbing the IFF? Conclusion & Recommendation

Understanding IFF Illicit financial flows (IFFs) are illegal movements of money or capital from one country to another. Especially when fund are illegally earned, transferred, and/or utilized. E g. 1: An importer using trade miss invoicing to evade customs duties, VAT, or income taxes; A corrupt public official using an anonymous company to transfer dirty money to a bank account in a money paradise country ; Or an PO escaping declaring his assets to escape taxes   GFI estimates that in 2013, US$1.1 trillion left developing countries in illicit financial outflows. This shows how serious this problem is

The Impact of IFF on Developing Countries? Ruin of natural resources and economy Making weak your economic system Lack of your economy control Establishing a stronger corrupt systems Promotion of cartels Decrease of tax revenues Where Does the Money Go? Every dollar that leaves one country must end up in another. Very often, this means that illicit financial outflows from developing countries ultimately end up in banks in developed. This does not happen by accident. Many countries and their institutions actively facilitate and reap enormous profits of massive amounts of money from developing countries. Developed countries have a responsibility, a big stake alongside developing countries to curtail the flow of illicit money.

What to do on Illicit Financial Flows? The most effective way to limit illicit financial flows is to increase financial transparency. By enacting laws and policies to: Detect and deter cross-border tax evasion; Eliminate anonymous shell companies; Strengthen anti-money laundering laws and practices; Work to curtail trade miss invoicing; and Improve transparency of multinational corporations. Fostering the culture of accountability from all stakeholders ( Governments, Private Sector and the Civil Society)

What Rwanda has managed to put in place to fight corruption and curbing IFF? An anti corruption law / Various policies to curb corruption A law to declare assets for Public officials in offices Institutionalizing the Public Account Committee at the Parliament to follow up on cases of corruption and utilization of public funds Anti corruption Unit within the Rwanda Investigation Bureau The Financial Intelligence Unit within the Central Bank , Last year the GoR enacted a law that will track money laundering and embezzlement by public officials while in offices , so that they can pay back

Conclusion & Recommendation Even though Rwanda is working tirelessly to curb corruption and IFF, Rwanda is also in the battle to attract more investors , and sometimes if countries don’t pay much attention, it is when IFF finds ground Despite efforts to curb Corruption and IFF , Rwanda still have issues of miss invoicing like several countries in Africa, we do still lose huge money in this Access of data for bilateral agreements and investments , Only government can access these information , civil society can not and this is the beginning of the lack of transparency. Lack of an independent Anti Corruption Body that can bring all stakeholders on board No much capacity for CSOs to engage and track IFF