A/HRC/36/52 23. Harmonization of global tax strategies. Base erosion and profit shifting refers to aggressive tax avoidance strategies practised by multinational corporations. By exploiting gaps and mismatches in tax rules, these corporations artificially shift profits to no- or lowtax jurisdictions, thereby eroding the tax base of the host country, which inhibits a country’s ability to guarantee the enjoyment of human rights to its people.36 Often, these host countries are poor countries in the South. The harmonization of tax strategies across the globe, anti-abuse clauses in all tax treaties and enhanced disclosure requirements and transparency in both source and destination countries would eliminate the incentive for multinational corporations to shift profits from one jurisdiction to another, 37 for if all jurisdictions offered the same or similar tax rates, there would be no incentive to move revenues around as a tax evasion/avoidance strategy. Similarly, if all national tax administrations worked together to ensure effective compliance, i.e., taxpayers pay the correct amount to the right jurisdiction, the opportunities for multinational corporations to engage in base erosion and profit shifting (and to thus author illicit financial flows) would be severely diminished. A few steps in this direction are already under way, including efforts by the G-20 leaders, who have called for the implementation of an inclusive framework for base erosion profit shifting; 38 a new joint IMF-World Bank initiative on strengthening tax systems in developing countries; and the Addis Tax Initiative, designed to dramatically increase donor support for building tax capacity in poorer countries. 39 24. Promotion of global anti-corruption and tax reform initiatives through greater civil society participation. 40 The United Nations Convention against Corruption, adopted in 2004, is a high-profile example of the mobilization of States as well as civil society, nongovernmental organizations and grass-roots communities to a common end: the combating of corruption. Significantly, while the Convention holds States primarily responsible for rooting out corruption and effective international cooperation, it also places similar responsibility on individuals and groups comprising civil society to provide the support States require to achieve such ends. V. National legislation: Switzerland 25. The case of Switzerland is very illustrative, as it shows that having an adequate domestic legal arsenal and political will do not necessary lead to the effective repatriation of stolen assets.41 26. With approximately 26 per cent of the world market for offshore private assets under management, the country is one of the major global financial centres. With particularly favourable national legislation on banking secrecy and lax anti-laundering laws, for many years Switzerland was a commercial paradise for the banking sector. Illicit financial flows, including the personal fortunes illicitly amassed by foreign dictators, indiscriminately flowed into Swiss banks. Banks acted with complete impunity and managed to avoid any kind of public control or scrutiny. 42 27. Today, in theory, Swiss national anti-money-laundering laws oblige the banking sector to systematically scrutinize the origin of funds of dubious origin and to report any suspicious cases to the Swiss intelligence financial unit. 43 Regulations also provide for an enhanced control of politically exposed persons suspected of having enriched themselves by illicit means. 36 37 38 39 40 41 42 43 See www.oecd.org/ctp/beps/. See Human Rights Council resolution 34/11 submitted by Tunisia (on behalf of the Group of African States) and other countries. See www.oecd.org/tax/concept-note-platform-for-collaboration-on-tax.pdf, p. 4. Ibid., p. 3. This demand is endorsed by both Juan Pablo Bohoslavsky and the Egyptian Initiative for Personal Rights in their responses to the questionnaire. In many other cases, there is a manifest lack of political will to repatriate stolen assets. Swiss Info, “The complex case of Tunisia’s blocked funds”, 6 April 2015. Financial intermediaries have the obligation to report to the Money-laundering Reporting Office Switzerland. 9