View previous stories
	Why a Trial in Paris marks a milestone for Anti-Corruption Activists by AFP, France 24, Transparency International France   25 June 2017 (AFP/France 24)   Investigators have widened a corruption probe into the French assets of three African ruling families, charging the daughter and son-in-law of Congo''s President Denis Sassou Nguesso, judicial sources told AFP on Sunday.   Julienne Sassou Nguesso, 50, and her 53-year-old husband Guy Johnson were placed under investigation this week for "money laundering and misuse of public funds", the sources said.   Investigators are trying to determine how the couple in 2006 were able to purchase a mansion valued at 3 million euros ($3.4 million) in the swanky Paris suburb of Neuilly-sur-Seine just north of the ritzy 16th arrondissement, according to a judicial source.   The tentacles of the case also reach out to ruling families in Equatorial Guinea and Gabon.   Julienne Sassou Nguesso is an insurance agent by profession and her husband is a lawyer.   Between 2007 and 2011, the seven-bedroom house with an indoor pool underwent renovations of 5.34 million euros, raising the couple''s total investment to nearly 10 million euros.   Investigators believe the couple may have financed part of the project through an offshore company in the Seychelles and with the sale of shares Julienne Sassou Nguesso owned in a telecommunications company tied to "corruption operations", the source said.   The French finance ministry''s intelligence unit Tracfin alerted the authorities to possible misconduct.   Investigators then found that millions of euros of state money had been funnelled from Brazzaville since 2007 to offshore accounts in the Seychelles, on Mauritius Island and in Hong Kong, which they believe were used to fund a lavish lifestyle for members of the presidential family.   "This affair that has been going on for 10 years will be dismissed through totally legal procedures," Jean-Marie Viala, Denis Sassou Nguesso''s lawyer, told AFP.   Johnson is also under investigation for the role he may have played as the asset manager of a real estate company that in 2007 bought a mansion worth 19 million euros in another posh area of Paris.   Denis Sassou Nguesso''s oldest daughter Edith Lucie Bongo Ondimba, who died in 2009, also owned shares in that company, as well as Gabon''s late president Omar Bongo, who was married to Ondimba.   French investigators have been looking into the entire Sassou Nguesso clan as well as relatives of Omar Bongo and his son, the current ruler, and President Teodoro Obiang Nguema of Equatorial Guinea.   Obiang''s son, Teodorin, is currently fighting a case in a Paris court for having allegedly pillaged the country''s assets to fund a lavish personal lifestyle.   The 48-year-old, known for his taste for supercars, luxury homes and bespoke suits, is suspected of using more than 100 million euros ($112 million) of state money -- proceeds of corruption and embezzlement, prosecutors allege -- to buy a six-storey mansion on Avenue Foch, one of the swankiest streets in Paris, as well as a collection of Italian supercars.   "At a time when we''re nearing the outcome of the Obiang case, we''re getting closer to the opening of a trial of the Sassou Nguesso clan," said William Bourdon, a lawyer for the anti-corruption NGO Transparency International.   Obiang has denied the charges, saying the money came from legitimate sources.   The trial set a precedent for France which has long turned a blind eye to African dictators parking ill-gotten gains in Parisian real estate and luxury products.   It came about after nearly a decade of lobbying by activist groups Sherpa and Transparency.   Already in March, the nephew of the Congo-Brazzaville president, Wilfrid Nguesso, was placed under investigation on the same counts.   The development is part of a series of enquiries by the French authorities into the assets of three African presidential families that began in 2010. http://bit.ly/2s7oC0R   June 2017   Why a Trial in Paris marks a milestone for Anti-Corruption Activists, by Shirley Pouget; advocacy officer at the Open Society Justice Initiative.   It took ten years to reach this point, but finally on Monday, June 19, Teodoro Nguema Obiang Mangue, vice president of Equatorial Guinea and son of the country''s president, Teodoro Obiang, will face trial before a criminal court in Paris, on charges of money laundering and diversion of public funds.   Teodorin, as he is known, stands accused of using his government’s treasury as a personal bank account—diverting millions to spend on assets including a set of luxury sports cars, a 76 meter yacht, and a five-floor, 101-room mansion on Avenue Foch in Paris, one of the city’s most prestigious addresses. Meanwhile, in Equatorial Guinea itself, most of the population of some 900,000 scrapes by on a dollar a day, despite a per capita gross domestic product fueled by oil exports that is comparable to that of many industrialized nations.   Teodorin has been facing scrutiny from law enforcement officials for some time. In October, 2014, he reached a $34m settlement with the United States Department of Justice to settle similar money laundering charges over his assets in the United States, which included a villa in Malibu, California, and a collection of Michael Jackson memorabilia. He is also under criminal investigation in Switzerland.   But the trial in Paris will mark the first criminal proceeding against him in open court—something that many believed would never happen. That it did is due entirely to the dogged efforts of the French public interest law groups and nongovernmental organizations who for nearly a decade battled to push French prosecutors to launch what has become known as the biens mal acquis—or ill-gotten gains—investigation.   The biens mal acquis affair dates from 2007, when Transparency International France—represented by French attorney William Bourdon, and working closely with Association Sherpa—lodged a criminal complaint with the Paris Prosecutor against three African heads of state and members of their families (Congo-Brazzaville, Gabon, and Equatorial-Guinea) on grounds of money laundering and misappropriation of public funds.   After a lengthy legal battle, Transparency International France secured recognition before the courts as a partie civile (civil party) in the case (in European continental legal systems—unlike common law systems, such as in the United Kingdom or United States—a victim of a crime acting as a civil party can play an active role in bringing a criminal complaint before a judge).   Transparency International France argued that the movable and immovable assets owned by those individuals in France could not have reasonably been acquired through salaries and legitimate benefits alone. The Paris Prosecutor’s office initially sought to block the investigation, and challenged the legal standing of the nongovernmental organization.   In 2010, the Cour de Cassation (the French Supreme Court) ruled the complaint admissible, leading to the opening of a judicial investigation into the misappropriation of public funds, misuse of corporate assets, and other offences. French police issued an arrest warrant for Teodorin in 2012; the investigating magistrates finally remanded him for trial in 2016.   The trial is set to take place over three weeks, from June 19 to July 6 this year at the Tribunal Correctionnel de Paris. In itself, the start of the trial is already a major victory for the global fight against grandcorruption, and for the public interest litigators and advocates whose commitment brought the case to this stage.   Never before has a sitting government official of such seniority faced criminal anticorruption proceedings in another country—for anticorruption advocates there are hopes that the trial will help establish new global standards that will create a powerful deterrent for the future.   Corruption costs African states billions of dollars a year. It is considered to be a very significant part of the illicit financial flows out of developing economies, depriving populations of the resources required to eradicate poverty and fulfil human rights, and crippling the rule of law.   Combatting corruption requires a range of responses—including not only action against the political leaders who are often leading beneficiaries, but also against the agents and intermediaries who facilitate the resulting money-laundering—including banks, lawyers, and real estate companies.   Ultimately, this work requires government action—including in the major financial centers around the world that reap the political and economic benefits of handling ill-gotten gains.   If governments fail to act, civil society groups can seek to present prosecutors with evidence that they cannot ignore. But enormous difficulties remain. Prosecutors are often reluctant to open judicial or prosecutorial investigations against senior public officials.   When they do, it takes years of work to trace and intercept the looted money—frequently hidden behind opaque shell corporations or dispersed into offshore accounts covered by bank secrecy laws. Witnesses are often unwilling to testify against their national rulers out of fear of reprisals.   Even in civil law countries, where private parties are allowed to initiate criminal actions, nongovernmental organizations face a wide array of legal impediments (such as standing, jurisdiction, and forum-related issues) to bringing legal action on behalf of victims of grand corruption.   Not surprisingly, many of the highest profile corruption cases directed at political leaders have involved those no longer in power—such as seizures by Switzerland, the United States, and other countries of over $1 billion dollars of assets stolen by Nigeria’s former president Sani Abacha, or Switzerland’s action to seize $650 million of assets held by former Egyptian president Hosni Mubarak.   But the opening of the Obiang trial shows what can be done to target those still in power. It also provides a prime example of how strategic litigation driven by civil society groups, alongside advocacy and campaigning, can be powerful tools against senior officials looting the wealth of their countries.   http://www.opensocietyfoundations.org/voices/why-trial-paris-marks-milestone-anticorruption-activists http://osf.to/2ugiFMw http://bit.ly/2ug1GK3 Visit the related web page
	Business and Human Rights: States duties do not end at national borders by UN Committee on Economic, Social & Cultural Rights   23 June 2017   States should control corporations across national borders to protect communities from the negative impacts of their activities, UN human rights experts have said in an authoritative new guidance on the Obligations of States parties to the International Covenant on Economic, Social and Cultural Rights (CESCR) in the context of business activities.   “States should regulate corporations that are domiciled in their territory and/or jurisdiction. This refers to corporations which have their statutory seat, central administration or principal place of business on their national territory,” the experts of the UN Committee on Economic, Social and Cultural rights say in the guidance, officially termed the General Comment, published today.   In practice, the Committee expects home States of transnational corporations to establish appropriate remedies, guaranteeing effective access to justice for victims of business-related human rights abuses when more than one country is involved.   In light of the practices revealed by the Panama Papers and the Bahamas Leaks, the General Comment emphasizes that States should ensure corporate strategies do not undermine their efforts to fully realize the rights set out in the Covenant.   "To combat abusive tax practices by transnational corporations, States should combat transfer pricing practices and deepen international tax cooperation,” the guidance states.   “Lowering the rates of corporate taxes with a sole view to attracting investors encourages a race to the bottom that ultimately undermines the ability of all States to mobilize resources domestically to realize Covenant rights.”   "This practice is inconsistent with the duties of the States parties to the Covenant. Providing excessive protection to bank secrecy and permissive rules on corporate tax may affect the ability of States where economic activities are taking place to mobilize the maximum available resources for the implementation of economic, social and cultural rights.”   The new General Comment sets out what States can and must do in order to ensure that companies do not violate rights such as the right to food, housing, health or work, which the States themselves are bound to respect.   “If States take seriously their duties to ensure businesses comply with economic, social and cultural rights, markets can gradually contribute to the aims of the Covenant. They will be more sustainable and move societies in the right direction. Communities will also be better protected from the negative impacts of corporate activities where they have had the most damaging consequences, such as in the extractive industry,” said Virginia Bràs Gomes, Chairperson of the UN Committee on Economic, Social and Cultural rights.   The Co-Rapporteur of the General Comment, Olivier de Schutter, emphasized: “Businesses cannot ignore that the expectations of society are changing. The first ones to change shall be rewarded by consumers, whose purchasing choices are increasingly driven by immaterial aspects — the reputation of the company, and the ethical and sustainability dimensions associated with its products.”   The experts highlighted that the issue of business and human rights had been addressed recently in different forums, including the Human Rights Council and the International Labour Conference, and through a combination of tools — regulations, self-imposed codes of conduct, economic incentives and action plans.   “These initiatives show how the field is fast-growing, and this is welcome. It entails the risk, however, that States lose sight of what is obligatory, as opposed to what is simply recommended as a good practice,” added Zdzislaw Kedzia, the Vice-Chair of the UN Committee on Economic, Social and Cultural rights.   “It also may be tempting for States to seek refuge behind the initiatives taken by the corporate sector, rather than adopting the appropriate regulatory and policy initiatives that they must adopt. Our General Comment seeks to recall their obligations under the Covenant and define the role they must assume in regulating corporate conduct.” http://bit.ly/2tiQ3oe   June 2017   Tax competition and corporate tax avoidance - inconsistent with human rights. By the Center for Economic and Social Rights   Last week, a key UN human rights body made its most definitive statement yet that corporate tax dodging – and the policies which encourage it – are incompatible with governments’ legal duties to guard against business-related human rights abuses, even when committed beyond their borders. This landmark development represents the latest signal that human rights protection bodies are increasingly poised to hold governments and companies to account for tax injustice.   The UN Committee on Economic, Social and Cultural Rights – mandated to oversee compliance with the International Covenant on Economic, Social and Cultural Rights (binding in over 160 countries) – released its General Comment 24, the most recent authoritative interpretation of States’ human rights obligations in the context of business activities since the UN Guiding Principles on Business and Human Rights were adopted in 2011.   “Lowering the rates of corporate taxes with a sole view to attracting investors encourages a race to the bottom that ultimately undermines the ability of all States to mobilize resources domestically to realize Covenant rights,” affirms the Committee. “As such, this practice is inconsistent with the duties of the States Parties to the Covenant.”   The General Comment details governments’ legal duties to prevent and address the adverse impacts of business activities on human rights including, significantly, when these occur outside of the country’s territory.   Combatting corporate tax abuse—which robs government coffers of billions every year—remains an under-explored yet crucial aspect of ensuring businesses respect human rights, as CESR has argued in various human rights and development fora.   As the SwissLeaks, Luxleaks and Panama Papers scandals all laid bare, corporate tax dodging has huge implications for governments’ ability to resource human rights. CESR research has shown, for example, that tax dodging via Switzerland by multinational copper firms operating in Zambia may amount to as much as $326 million annually, equivalent to about 60 percent of the country’s health budget. In India, meanwhile, just one Swiss bank helped high-net-worth individuals dodge taxes at a cost of up to 6 percent of total social sector expenditure in 2016.   This is the price of particular tax and financial policies put in place by particular governments to allow and even encourage companies to increase their profits by shrinking their tax costs.   Historically, the human rights protection system has been reluctant to engage in matters of tax policy, particularly cross-border tax abuse. Slowly but surely, however, human rights treaty-monitoring bodies mechanisms are growing increasingly adept at analyzing and holding governments to account for enabling corporate tax abuse.   Heeding findings and recommendations submitted by CESR and partners across the tax justice and human rights fields, last year the UN Committee on the Elimination of All Forms of Discrimination against Women (CEDAW) and the UN Committee on Economic, Social and Cultural Rights both ruled last year that the financial secrecy laws and lax corporate reporting standards of Switzerland and the United Kingdom, respectively, were inconsistent with their human rights duties under international treaties.   What’s more, the UN Committee on the Rights of the Child released a General Comment on public spending in 2016 which addresses the need to tackle tax abuses as a means of mobilizing resources to fulfil children’s rights in compliance with the Convention on the Rights of the Child.   Building on the legal interpretation of the UN Special Rapporteurs on Extreme Poverty and Foreign Debt, the new Comment by the UN Committee on Economic, Social and Cultural Rights urges governments to “encourage business actors whose conduct they are in a position to influence to ensure that they do not undermine the efforts of the States in which they operate to fully realize the Covenant rights, for instance by resorting to tax evasion or tax avoidance strategies in the countries concerned.”   Recognizing that international tax rules are governed through bilateral treaties, the expert body confirms that: “States Parties must ensure that they do not obstruct another State from complying with [human rights] obligations under the Covenant. This duty is particularly relevant to the negotiation and conclusion of […] tax treaties.”   The Committee characterizes tax competition and tax secrecy as antithetical to international cooperation. In addition to condemning the race to the bottom on corporate taxes as “inconsistent with the duties of the States Parties to the Covenant,” it cites the earlier treaty body findings on Switzerland and the UK to affirm that: “Providing excessive protection to bank secrecy and permissive rules on corporate tax may affect the ability of States where economic activities are taking place to meet their obligation to mobilize the maximum available resources for the implementation of economic, social and cultural rights.”   The Committee points to a broader policy reform agenda towards ending corporate tax abuse, indicating that governments have international legal duties toward meaningful tax cooperation. This includes re-thinking the current international tax rules which allow multinational companies to avoid taxes by treating them as if they were composed of hundreds of distinct companies in favor of taxing multinational companies as what they are: unitary entities.   “To combat abusive tax practices by transnational corporations, States should combat transfer pricing practices and deepen international tax cooperation, and explore the possibility to tax multinational groups of companies as single firms, with developed countries imposing a minimum corporate income tax rate during a period of transition.”   At a time of entrenched fiscal austerity and growing economic inequality, the Committee’s Comment is one more important step towards highlighting the human cost of corporate tax abuse. Importantly, it explicitly names tax abuse as a type of corporate activity that undermines rights within and beyond borders, and identifies the types of policies that permit or prevent it.   This offers human rights and tax justice advocates more concrete standards to which countries and companies can be held accountable for the human rights consequences of their tax behavior.   http://cesr.org/tax-competition-and-corporate-tax-avoidance-inconsistent-human-rights-un-treaty-body Visit the related web page
	View more stories