Third Session of the Intergovernmental Negotiating Committee on the United Nations Framework Convention on International Tax Cooperation

Good morning everyone. I would like to welcome you to the last meeting of the third session. And happy that we are here now and that we are able to reach this moment while we get all a lot of good thoughts and outcomes that will enable us to move to the next phase of this process. So welcome, and I think we are ready to start. We're still in work stream three. We are going to continue the discussion in the last few questions and listen to your thoughts and feedback and reflections on the last few questions. Our colleague Michael from Germany will lead us through this. Over to you, Michael.

Thank you, Mr. Chair. Good morning, everyone, dear colleagues, distinguished delegates. We will need to proceed without my colleague Marlene today. There's no reason for concern. She conveys her warm greetings to us and wishes us all success. Yesterday, yesterday noon we concluded our, we concluded the day in the midst of our discussions on dispute resolution and in concrete on approach to MAP and other mechanisms aiming at settling disputes. We heard intervention from numerous member states and as a result we did not have the opportunity to give stakeholders the floor to contribute on this topic. We will make up for that first thing this morning and of course Member States too can take this opportunity to speak. Later on we will tackle the last two questions. With that, the floor is open and we start with Latin DART. Thank you.

Thank you, dear colleagues. I represent LatinDAD, the Tax Cooperation Network of Latin America that integrates the global tax justice organization in civil society. We've said many times that the priority of our discussions in the framework convention between states should be to find mechanisms for the prevention and negotiation and not just in creating mechanisms for dispute settlement in particular for international tax cooperation. Unfortunately, at present, many disputes and international controversies in the taxation field are due to the fact that between states has been created a tax governance infrastructure which excludes certain people and favours multinational interests and the richest economies to the detriment of the global south. This has led to unjust allocation of tax rights within the system, referring specifically to the price transfer systems and bilateral transfer pricing to ensure no double taxation, which have been treaties of no double taxation to the benefit of multinational corporate world. We are completely against arbitration being considered as a mechanism for dispute settlement, whether it's voluntary or compulsory. This represents a loss of national sovereignty and implicitly considers that national legislation frameworks in countries are not reliable. The experience of arbitration in terms of international trade have meant for Latin America very high economic costs, not just because they need to finance very long litigious processes, very expensive ones, but also judgments against Latin American countries. In the recent decade, the region has faced a strong wave of requests within the international system of arbitration characterized by a lack of transparency in arbitration procedures, a lack of impartiality and independence of judges. For a private, so one day a judge can represent a private investor, another an arbitration court. From our perspective, Arbitration is a system of domination and imposition. Arbitration does not mean the amicable nor conciliatory settlement of disputes. It's more related to the possibility of favoring the strongest party in the dispute. Finally, we would like to reiterate that we need a framework convention which is robust, which strengthens multilateralism, as the main mechanism of dispute settlement, which covers the feeling of an international tax governance system which is inclusive, which guarantees tax transparency through single taxation with a form of distribution, public reporting country by country and which replaces the current international tax system, which is opaque, promotes tax fraud, and negatively affects the economic resources of the global south. Thank you.

Thank you, Latendard. Next is OTE. OTI was, this is an accident, are you asking for the floor? Can we give the mic to OTI please to clarify?

I think it was a mistake.

Understood, then we move on to war on want. War on Want, please.

Morning, everybody. I am speaking on behalf of War on Want and wider civil society. I wanted to compliment yesterday's conversation with a couple of cautionary tales of arbitration gone wrong. In 2024, my country, the UK, closed its last coal mine. Months later, the High Court rejected applications for a new coal mine. After 200 years of mining and burning, this rejection of coal was a major climate success and that should have been the end of the story but this August as many of us were sitting in a basement in New York news broke that a Singaporean company was suing the UK over its rejection of the coal mine using an obscure investor state dispute settlement clause of a 1975 trade deal now the UK could be on the hook for millions. Similarly, in 2022, as energy industry profits were erupting, Germany and Denmark tried to introduce a windfall tax, but a company based in Jersey dug out the 1994 Energy Charter Treaty to challenge the windfall tax. and forced both countries to drop these progressive environmental measures. In tax and trade, we have clear evidence that arbitration undermines sovereignty, reduces revenues, fragments our legal systems, and has a chilling effect on environmental policy. Countries north and south should reject arbitration from this convention. Finally, Chair, As this is one of the last civil society interventions of this session, I hope you'll indulge me. Delegates, you have the privilege of shaping a new international tax system, and the timing could not be more crucial. Inequality is exploding. We could soon see the world's first trillionaires. Countries are losing billions to corporate tax dodging, and public services are crumbling. We need to build a new global tax system where we can tax the super-rich, where we can raise trillions to fund climate action and sustainable development, and where we can redistribute resources between North and South. So when you submit your visions for what the UN tax convention should look like on 5th of December, we implore you be bold. Thank you.

Thank you, War on Want. We continue with the independent expert on the effects of foreign debt.

Good morning and thank you very much. It's hard to come after the call to action, but I will take us back into the work stream. My biggest challenge with the conversations we're having around the different types of dispute resolution is actually a question in my mind as to why we came into the area of arbitration. And arbitrations are confidential. you often do not get to see the proceedings. And the joke that I hear in many developing countries is that the only outcome we see is the bill that the member state is going to undertake as to how much they're going to pay either their lawyers or the arbitrators, because this is the only thing that is traditionally allowed in public spaces. And of course, that is always what we then end up speaking about. but we are also unable to develop legal precedent, we are unable to develop decisions in a particular direction, add layers onto regulations and policies, and as a result, if these different dispute resolution mechanisms are going to be considered, Then very important, there is the question of the fact that we are operating within a UN framework, which means that member states, citizens in their countries have a right to access information. And this is human rights parameters and these are binding treaties that member states have already committed to. So it's really important that even as we look at these alternative dispute resolution mechanisms, that we take this into consideration. The second reason why arbitration and other forms of dispute resolution became extremely valuable was because many developing countries actually didn't have robust legal frameworks within their countries and judiciaries to support decision-making processes, and there were concerns around the slowness and speed of judicial decisions. Well, arbitrations are taking as long as, if not longer than judicial decisions, in many countries across the world, and as a result this argument no longer holds the value it had before. Within the UN system there are two mechanisms of court proceedings already present which are worthwhile reflecting upon. One is the Permanent Court of Arbitration and the other is the International Court of Justice, and I think that if you are to look at dispute resolution mechanisms it is very important to engage with the UN existing systems in place and they do have different procedures, they have panels that are worth considering. But I also want to return us back, which is something I have repeated several times, on countries under special circumstances and how these would be managed in these diverse dispute resolution mechanisms. There was a question on what the role of the secretariat could be. And I think the role of the secretariat could be very valuable here. They could form panels, they could ensure that these are balanced and these are accessible if they are going to go in this direction under this convention. And it is very important to ensure that there is representation across all continents and across all groups. I thank you very much for your time.

Thank you, African Union.

Thank you, Chair, for giving us the floor. The African Union supports the reinforcement of MAP through both the protocol and best practices to make it more efficient and also more accessible. In doing so, we want to encourage members to be bold, to carry out a significant review of the existing MAP design. ensuring that all the bottlenecks and all the things that make the current system inefficient is weeded out. We also want the design to take cognizance of the fact that in the context of the protocols we are developing and future protocols that may be developed under the framework, the likelihood for multilateral MAP will be higher. So the design must ensure better efficiency in application of MAP to a multilateral dispute. With respect to paragraph J, we definitely support provision that boost efficiency using information sharing and other similar measures. We say this because we know that disputes breed from lack of understanding, which sometimes are direct result of lack of appropriate and accurate information. On K, we have a bit of ideas on how a panel that may be part of this mechanism could be composed. For instance, we believe that to be composed of government officials drawn from experts within the government of our various nations. And we say this because the expert better understand what a position of government will be in terms of dispute. and they also have better motivation coming from government than just picking individual expert from the street. We also do not support, just like the African group have posited yesterday, we do not support inclusion of arbitration, either as a core mechanism or as optional mechanism. Nevertheless, we go back to our comment earlier on to say, that MAP once was reinforced should be part of the core mechanism and we probably could have other alternative mechanism as a pop-up or backstop to MAP which also should be optional to members in terms of its application after MAP may have failed. On what the role of the UN could be, I want to be specific to say that given the terms of reference, a mechanism has been mentioned, I think in paragraph 13 of the TOR. I believe that the UN role should be constrained to such mechanism which may be elaborated under this current proposed Article 20 of the Framework Convention. I say that drawing also from a lot of discussion I have had with colleagues, and it could only make sense that such mechanisms are tied to that article, ensuring that there is no proliferation of mechanism as we go into different protocols and also protocol number three in particular. These are our few thoughts for this morning, Chair, and we want to thank you again for the opportunity. We yield back. Thank you.

Thank you, African Union. The floor goes now to what is on my screen, PSI, but what could also be 11.11.11, sorry for that. PSI, can you please identify yourself? Yeah, go ahead.

Thank you, Chair. Thank you, Co-Chair. I'm Dr. Yanou from the International Organization of Public Services. It's a group of trade unions working in the public sector throughout the world. For us, in terms of PSI, we need to work upstream. The challenge does not lie in the lack of regulatory tools for dispute settlement, but in the volume and complexity of the system itself. For decades, rules on pricing transfer, rely on full competition, often on non-existing markets. These structural faults lead to differing interpretations, friction and conflicts for countries with limited administrative capacity. No mediation, no arbitration, no amicable dispute settlement. We are successful in a system which is created to sow discord. If we make it more complicated, then we won't resolve the issues, we won't resolve the root causes. Even the best dispute settlement mechanism is very active when it's triggered, the financial loss already suffered, the administrative charge absorbed, and the relationship between authorities is made more tense. A more effective means lies not just in strengthening capacities, however important that may be, but through a systemic reform of taxation of companies. You will agree that when the rules are clearly established, it reduces ambiguity, the recourse to subjective comparisons, and thereby strongly diminishes litigation. PSI recommends strengthening of cross-border cooperation, but only if this is part of a system which is simpler and more predictable. Capacity building can also be useful, but only if it consolidates a coherent and fair framework rather than greater capacity to manage the unmanageable. Within this context, at PSI, we believe that Workstream 3 should not dedicate considerable resources to the implementation of new dispute settlement mechanisms, The scope of the issue goes well beyond what this kind of procedural process would resolve. We need to replace the system which generates disputes in the first place. This requires a transition towards rules which limit discretionary power, reduce the gap of interpretation and produce stable results in all jurisdictions. This is how we can reduce litigation, not by perfecting are tools to fight against fires, but by rethinking the system itself to avoid the fire starting in the first place. For PSI, transparency measures are essential for prevention of disputes. For increased transparency, we need to examine the publication of national reports, the implementation of a national registry of assets, the need to determine benefits, the automatic exchange of information. And we choose the path then to reduce litigation at source. Let's choose reform, transparency. Transparency is not an accessory to justice, it is a foundational stone of it. And prevention is how we can act the best. Thank you.

Thank you, PSI. ICC is next.

Thank you, Mr. and thank you, Chair. Good morning, everyone. On the first question on the slide, we agree on the effectiveness of MAP as it was expressed by several, if not all, delegations yesterday. And we welcome reflections and consideration of how these can be improved and become even more effective, leading to more certainty for taxpayers and tax administration alike. We also believe that arbitration as well as other alternative dispute resolution mechanisms such as mediation, conciliation should be considered as they are effective and efficient ways to solve disputes. But we also take note of the concerns that have been raised and I think it would be important to try to really map these concerns and see how they can be addressed to make sure that these instruments can be effectively beneficial and considered effectively. I also would like to make sure that, um, we also have an understanding of arbitration. Arbitration is a word that comes up in different legal fields. We have arbitration, um, such in the context of model convention of the OECD, but also investment arbitration is different from that. Arbitration from the model convention, um, is, uh, is a way to, uh, address situation where competent authorities cannot reach a map. Investment arbitration is a completely different animal, and then commercial arbitration is another one as well. So I think it would be important to understand in the context of tax arbitration, which are the concerns, and in a constructive way also see how these concerns can be addressed by also looking at other areas. So you might know that ICC is not only a business organization with permanent observer status, but it's also home to the International Court of Arbitration. It's commercial arbitration. It's a different thing. But the topic of clarity, transparency, fairness in arbitration, commercial arbitration has also been addressed in the context of commercial arbitration. So maybe it would be interesting to look at how these concerns have been addressed in this area of the law. We have an ICC note on the conduct of arbitration under the ICC rules that specifically look at transparency in the selection of arbitrators and provide us information. We also have rules on publication of words in a balanced way in order to strike the right balance. that's you because the commercial arbitration you have um it's it's between businesses and uh it is important uh that parties trust the system so we work very hard on making sure that the system is is trustworthy and it's a fit for purpose and so there are things that can be learned from there as well and we would be happy to share that experience um but I think it would be very useful to have a dialogue on which are the concerns mapping those concerns and see if really we can learn from other other areas um this also goes not just in but also on commercial mediation, conciliation, we have experience in that field. Again, not just in the tax sphere, but in other areas of the law, such as trade and commercial law. And again, very happy to share that experience and see if we can effectively address those concerns and making sure everyone has trust in this dispute resolution mechanism. Thank you.

Thank you ICC. We move on to the International Bureau of Fiscal Documentation.

Thank you Chair for granting me the floor and good morning everyone. With regards to the first question, yes we welcome all efforts to reinforce MEP, particularly for developing countries or countries with smaller treaty networks and also inventories on MAPDA little that impact on experience. So, um, we also encourage the exploration of possible features that would help with developing tools to, um, enhance experience building, including creation of committees or practice where experience can be shared on things and someone mentioned yesterday the development of rules or procedure. So I feel these things would be able to help a lot of developing countries in gaining experience and capacity in MEP. Then with regards to the optional mechanisms, yes, we do encourage exploring optional mechanisms that would enhance um dispute resolution and to this consideration should be taken to the concerns that have been expressed by a lot of members yesterday especially concerning arbitration and um I feel mechanism should be put in place to demonstrate transparency and fairness in the process and also where necessary or where relevant, exploring modifications that could be made. The previous speaker also mentioned a lot that has been done with fairness and transparency under the ICC. I think that should be something that should be looked into and also other organizations on what has been success stories in this. So generally, yes, we encourage all things that would give a wider range of options to countries on how to speedily and timely resolve problems. So thank you very much for the opportunity to share this and that should be all for me.

Thank you. Okay, thank you. We go to the next speaker, which is DMUN Foundation.

Thank you so much, Chair. My name is Miriam Nafula from the DMUN Foundation, speaking on behalf of the FFD Children and Youth of the major group for children and youth. Excellency, distinguished delegates, The problem now under negotiation, particularly the tasks negotiation and its related issues operate on a timeline that is faster than the traditional pace of political cycles and break. For children and youth, a negotiation holiday means critical time is lost for implementing the task negotiation and its practice therefore Every delay in reaching a task agreement or a peace accord to it is a day taken from the world we will inherit. Thus, the impact of inaction are happening now, and they will disproportionately steal our chance for a stable and prosperous adulthood. Excellencies, distinguished delegates, Our rights require an unstop vigilance. For example, children and youth affected by war, exploitation or displacement, a break in talks on tax means a danger to them. Our rights to education and health should not be subject to diplomats vacation schedules. Negotiation are the engine for aid distribution, securing vulnerable population and preventing violence. When the engine stops, the children who are already in the most desperate situation are the first to be left behind and forgotten. We demand that our voices are not only invited to be heard in a tokenistic way during large, high profile negotiation and are excluded from the continuous detailed work done behind the scenes. Our argument is that the issues are continuous. If the issues are continuous, our future will indeed be ruined. We, the young people, urge all of you today that let the agreement be implemented and established. Thank you so much, Chair. I'll take a minute to hand over to my colleague here. I will be read in French. Thank you so much. Thank you, Chara.

So my name is Divine Ella. I'm from Congo and I'm one of the DMUN representative. So I will be giving our closing remark in French. So,

Excellences, distinguished delegates, we highlight the importance of the work underway and now launch a call for continuation of collaboration and commitments towards a system which is fairer and more inclusive for all. We highlight the importance of intensive discussions, placing emphasis on shared progress, and we urge all negotiators to stay committed to the process, aiming to achieve the Sustainable Development Goals as created in 2015, when all member states of the United Nations adopted the 2030 Agenda. We, the youth, recognize the work accomplished and its importance during this period. We have all laid out the essential foundations to create a new era of global tax cooperation, which should be fair, inclusive and respond to the needs of the youth and other people who need it the most. Discussions should achieve the implementation of a more robust and fair system, and the equitable distribution of tax rights, taxation of digital services, and establishment of a new system for dispute settlements in order to achieve the SDGs. This is a unique opportunity to reform global tax systems which are obsolete and dysfunctional. We need to show ambition and the urgency needed for this process, to show clarity to achieve the progress that we want, not just economic justice, but also equity in order to ensure that the system functions for all and not just for very few. We insist on the need for inclusivity. The goal has not yet been achieved, so we all need to prepare for difficult work ahead of us in order to fill any remaining gaps and create a system which serves everyone. The commitment for international tax cooperation which is inclusive and effective requires decision-making structures which are legally established and transparent in order to ensure that all countries can be committed in a significant manner in the process. The youth insists upon the need for collaboration, needs to ensure that negotiations are not just substantive but also decisive. In addition, the time has come to make choices. We can't just know what the right choices are, we need to take them and take action without waiting further. Thank you.

Thank you. The MUN Foundation, we continue with the Bombay Chartered Accountants Society.

Thank you, colleague, for this opportunity. We agree with meeting with the taxpayer as suggested by Russia. We think it's a good suggestion to get full and correct facts, which will help tax administration in resolving cross-border disputes. We believe that time bound resolution of dispute is necessary and therefore protocol should provide for the same. We do not support provision of arbitration. However, other mechanisms can be recommended on optional basis. We believe that disputes are best be resolved through bilateral negotiations. Sir, UN can play a positive role in capacity building adoption of a country in setting up and upgrading its dispute resolution mechanism. Thank you for this opportunity and may I, at your permission, with permission, request my colleague to supplement the discussion.

Thank you, co-chair. My comment is on, you know, the last clause which is on the screen. The involvement or role of UN is very interesting. Now, the way I read this sentence, it is referring to the the operations of these resolution mechanisms and I believe these means the ones which are written in the preceding bullets which is MAP and arbitration. I'm not sure whether the committee has thought of creating a resolution panel of its own of this, you know, of the member countries, the way it was proposed in pillar one, there's a two tier mechanism of review panel and determination panel. Uhm, the committee may want to consider this because if that happens, you know, then that would be a completely new sort of mechanism for resolving disputes. Thank you.

Yeah, thank you, BCIS. Uhm, for the sake of clarity, the, in the question L, These resolution mechanisms, yeah, it refers to MAP, to arbitration, but not only. So it is also about mediation or conciliation as optional tools. I just want to flag that because every one of us will get the opportunity to also comment on those questions in writing following this session. Thank you. We continue with the African Tax Administration Forum.

Thank you, co-lead. Your Excellencies, good morning. We'd like to first and foremost to start by aligning our comments with the comments that were made yesterday by Nigeria on behalf of the African group, further comments made by India, Russia, and the comments made just this morning by African Union. And to some of the specific comments, we want really to underscore the importance of ensuring that the MAP remains the core mechanism of resolving cross-border tax disputes and noting its wide adoption by many countries and experiences countries continue to build in this area. And so, want to emphasize that there are a couple of areas definitely on the MAP mechanism that will need to be improved, including the timeliness and of course other issues around transparency that this protocol should ensure that are addressed and of course to ensure that MAP is more accessible by taxpayers and definitely effective. But I think there's one particular aspect of that which is very important particularly for developing country and that countries and that is issues of capacity building. So as part of this work stream we want to underscore the relevance of ensuring that there is more capacity building around MAP procedures and of course sharing best practices for countries to effectively implement MAP. Like others have shared and of course very good experiences that have been articulated already, we are strongly opposed to the idea of having arbitration in this protocol. for many reasons that our countries have already shared, issues around constitutional limitations, costs, transparency, and of course the power symmetry that is associated with arbitration processes. And also we've looked at some statistics and evidence out there in relation to the investor state dispute resolution where arbitration has been playing out. We've seen a shift where some of those old agreements now are moving away from arbitration to more of embracing domestic tax court systems and also states to states mechanism of dispute resolution. And therefore, it will not be good for us to go to a system that is already being challenged for a range of reasons, including the awards that are significant affecting obviously the economics of very many countries. And for those reasons, therefore, we oppose the idea of arbitration in this protocol. Having said that, I think we also welcome the idea of exploring other mechanism, perhaps mediation, but those needs to be developed very well and of course ensure that those remain optional. As the last question on the role of the UN, we can see a significant role there, including establishing some panels that will be used for resolving the disputes and also coordinating the activities around dispute resolution. in within the framework of the MAP procedure or any other alternative procedure that we're going to agree on. As a matter of fact, it's important those panels remain highly representative so that all regions and countries as much as possible are fairly represented to ensure inclusivity. Thank you.

Thank you, Adeff. We have two more stakeholders. we want to take, want to give the opportunity to take the floor. After that, we move on with our agenda. So it is South Centre followed by CFS.

Thank you, Chair, for the opportunity. South Centre supports the proposal to improve maps. and make them more effective and accessible to countries. And we also are opposed to arbitration, as we had earlier mentioned and also mentioned by a number of countries on the concerns about maps. Experience shows that they are costly, dominated by a few jurisdictions, and may undermine national sovereignty. Hence, it should be left out of the protocol. Then on mediation and conciliation, they are largely untried and untested tools in resolving tax disputes across borders. So their efficacy still remains unknown. So introducing them at this stage may create uncertainties and we propose that they should be left out of the protocol at this point. The UN can establish a forum to manage administration of this protocol so it can play the role of capacity building, coordinate cooperation among countries, including maintaining data on issues like map statistics. So we support a forum for the UN to support this. Thank you.

Thank you, South Center. CFS, please.

Thank you for giving me the floor. I also take this opportunity to thank the member states and stakeholders for their reasoned views that will help shape protocol two. I think the bottom line for us is that member states must ensure that this particular protocol delivers fair, predictable, and accessible mechanisms that safeguard our tax bases, particularly for African states and LDCs who have historically borne the costs of international tax cooperation without commensurate benefits. The framework convention must first establish genuinely reciprocal foundational obligations, capacity supported cooperation frameworks and protective resolution mechanisms for protocol two rather to be useful. So critically, we've been hearing member states yesterday and stakeholders today reject arbitration. Now good faith negotiations then demand that those states favoring arbitration consider modifying their positions. Arbitration has indeed held, fought for a considerable time costing state millions of dollars that could have financed local development needs while consistently producing outcomes that curtail source country taxing rights. We've got enough data to look at the legal costs that majority of the developing nations have incurred as a result of the arbitration process and we'll be happily submitting this on the 5th of December for your committee's consideration, particularly the co-leads to this protocol. So protocol two, therefore, it presents an unprecedented opportunity to refuse participation in regimes where capital importing states subsidize adjudication mechanisms that have historically privileged capital exporting jurisdictions interpretation of tax treaty provisions. We would then insist that dispute resolution options under protocol two do not replicate investor state arbitrations, structural biases, and that any resolution mechanism includes global south arbitrators, mediators, conciliators as well, as well as negotiators who apply interpretive principles that favor source taxation and convene under a UN body. Thank you, Chair.

Thank you, CFS. So we shift our focus to the next topic, which is access to information, transfer pricing databases in particular. Thank you. That is the slide that is our focus now. And on this slide there's a small mistake I made and for which I want to apologize. The slide suggests that the subject of access is, well, the issue of access to information is limited to text dispute resolution only. In the concept note it is reflected more correctly that according to the scoping phase that we have undertaken in the summer, information asymmetries are an issue and a major obstacle in both the prevention as well as the resolution of tax disputes, cross-border tax disputes. So please don't let yourself get a strain from the question here, but consider instead also the preventive dimension of things. With the view to the current state, Challenges related to cost, coverage, data quality were highlighted. Therefore, we have heard broad support for improving access to TP databases. And a number of ideas were mentioned, including public UN transfer pricing database and also the option of pooled purchasing. where countries could negotiate joint access to commercial databases. Also on that, several delegations raised some concerns regarding governance, regarding feasibility as well as cost. The approach for the time being suggested by the co-leads is to continue exploring the most efficient ways to improve access to TP databases. We as a committee are now invited to discuss the question you are seeing on the screen. First, whether member states could share perspectives on the possible governance arrangements of a potential UN managed database, including questions of financial implications, management responsibilities, participation of member states and safeguards for data confidentiality and integrity. And secondly, whether other types of databases could be considered, such as databases compiling bilateral APAs or MAP cases. The floor is open. United Arab Emirates, please.

Thank you, co-lead. Just on point M, we are supportive of any sort of initiative which will provide equitable and just generally access to comparability data for all member states. Just on N, regarding the database, We want to understand further, well from anyone on the floor, in terms of the envisaged benefits of a database. I could see, especially for bilateral APAs, how it could be a self-fulfilling prophecy in terms of if people see more bilateral APAs being concluded, then it may encourage them to adopt a bilateral APA programme of their own. But I think just one thing to sort of be aware of is that, in terms of APAs and MAPs, transfer pricing outcomes that are agreed should not set a precedent for others, because those outcomes are based on a particular set of facts and circumstances. We wanted to understand further from the floor what would be the envisaged benefits of having a database and what kind of detail would be available in there, giving due importance to taxpayer confidentiality as well. Thank you.

Thank you, United Arab Emirates. Yeah, indeed, so I can deflect that question and it goes to the floor as to whether and as to how databases populated with APA or MAP cases could be a suitable approach. Maybe in that regard it is also worth mentioning that In the concept note it is noted that over time other measures under the protocol like for example APA or MAP and what are used of those instruments could also contribute to reducing information asymmetries more broadly meaning that maybe even without populating a database with such APA, MAP outcomes member states would gain more information and by that mitigate the information asymmetry that is perceived so far. So the floor remains open. I have Italy now asking for the floor.

Thank you, Colleen.

Good morning, everybody.

Just to reflect upon the fact that building a database is very expensive. So again, we should build on what is existing and as UAA said, perhaps here we have to work more concentrate on the safeguard that we can have to write up confidentiality, the protection of data, which is important for many domestic system. And it is again a cross-cutting issue for some of the commitment. And here again is very, very important, we think. Thank you.

Thank you, Italy. We continue with Nigeria.

Alright, thanks, Chair. I didn't know I was that up on the list, so my apologies. Good morning, colleagues, and thanks for the opportunity to share our thoughts on this question. I speak on behalf of Nigeria. in respect of the question M and N we have the view that having the relevant structure to manage each of the processes that will emanate from the framework and its protocols in my view should be a concern at this stage. and then the mandate for each of the ah subsidiary bodies that will be created ah under the framework in my view ah should be where we begin to discuss what exactly each of the subsidiary bodies will do. Ah in my view ehm discussing this topic under protocol number two may create gaps or overlaps. Ah I suppose discussion as to ah governing bodies and their mandates ah should be discussed under the framework itself. Ah ah and then it will be a lot in my understanding ehm more straightforward ehm to look at each body that is created ah what functions they will perform and we could then allow them to choose the methodology or the tools that are available to them or they deem more appropriate for their mandate. Ah if we begin to prescribe ah types of databases and all of that. Then we we may ah in one way or the other be putting such bodies when created ah when or if created ah into a straight jacket that they are not able to function ah based on prevailing circumstances. And so chair and co-lead, my suggestion would be that this question M and N shouldn't come under this protocol, should be issues discussed under the framework itself when we're talking about the various bodies, governing bodies that will operate both the framework itself and the relevant work streams or protocols that will emanate from the framework. I submit, thank you.

Thank you, Nigeria. I believe that the distinguished delegate from Nigeria made a good point that we have to be mindful that we're talking here about something that eventually is going to be addressed primarily by the framework convention. However, at the same time, we are not there yet in prescribing anything. So the approach or the proposed approach is in exploring ways forward. And I can imagine that this is a point that is suitable for the close coordination that we are having with work stream one anyhow. And it is probably like a feedback loop, our input feeds the discussions on the framework convention and vice versa. Yeah, but it is true that we have to remain mindful of that. Want to add anything to that?

Just adding that I agree with that and I think exploring the idea, this is the right place in which we explore it as a way for prevention, where it will be addressed or where it should come, yes, maybe it's not under the protocol, may go to the framework convention, but just saying like I think this is the right place to talk about it, more than to be discussed as an idea for prevention under the framework convention. reach a conclusion about it, then we can coordinate with the convention how this can be presented under the convention, under the relevant mechanism. Thank you.

Thank you, Mr. Chair. Nowai, please.

Thank you, Mr. Collett. I'm mindful of the intervention Nigeria made just now, so I think I will just speak to the questions themselves and not take any position on whether they should be discussed in this protocol or in relation to the framework convention itself. We think there is merit in exploring whether or not there is kind of a cost benefit to have a UN database on comparables. This issue of lack of comparables is a recurring issue in particular in relation to developing countries and we think it would be a very important progress if we could improve the access to data. Now having said that, of course, the access to data is only as good as the reporting requirements in each member state. So in exploring this, we might be taking that into account and making that also part of any evaluation of whether or not the UN is a better home for such a database or if the commercial databases are still the best home. I think like Itli said, it's important in any case to maintain sufficient data and confidentiality requirements. Of course, establishing and keeping such a database updated is a very big task, and that is why it is a commercial issue. So I think exploring this would be a very good idea. we would be supportive of that. When it comes to other databases and specifically the issue of compiling bilateral APAs and MIP cases, we could explore that too, but it's important to keep in mind what these actual agreements often look like. Often it's just a very short paper. outlining very high level information and a very short conclusion. So I think it's relevant also to consider what kind of use member states would have of such database. Sometimes it could be good to know that a taxpayer has such an agreement in place. But in this particular space, confidentiality is particularly important. So I think that it's worth exploring these issues further, but on the basis that the committee also agrees. Thank you.

Thank you, Norway. Next is France.

Thank you so much, sir. I'm going to speak French. Now, regarding the first question, you had indicated that the setting up of a database is something that is indispensable when it comes to breathing life into this protocol. It's a fairly effective way to prevent disputes. It seems to me that the setting up of databases is something that is intimately linked with the bolstering of administrative capacities to ensure that there is genuine information sharing. However, it seems indispensable to me to point out that databases and other instruments already exist. And as we said earlier, we have to ensure that there is no duplication with existing instruments. Within the framework of this protocol, what would be interesting would be to identify instruments, databases which already exist, of course, to identify problems being encountered by states when they use these databases and within the framework of this protocol improve them. Improve them and achieve our objective which is that of efficiency, effectiveness and to make things easier for the taxpayer. Finally, we could perhaps consider, because we're all aware of the cost to access these databases. Perhaps the UN could purchase licenses to access these mechanisms. More specifically on little n and the idea of setting up databases on bilateral agreements. We're not in favor of this for two reasons. and this also refers to mutually agreed procedures. The reason is that these bilateral agreements are the result of situations which are quite specific in every case, and it's very difficult in our view for states to use procedures for one example applicable to one example in another case which might not be exactly identical. And as Norway said, there is the issue of updating these databases, which would involve regular monitoring to ensure that we don't end up moving away from our objective with bilateral agreements which will find themselves simply inapplicable to situations just a few years down the road. And last thing, it seemed to me important to mention this, if there was a development of these databases, Data will of course have to be protected. So the issue of confidentiality and integrity, especially the confidentiality of the taxpayer. Thank you.

Thank you, France. Portugal, please.

Yes, thank you. And it is the first time I'll take the floor. I want to thank Kenia for the warm welcome and also thank the secretariat. and the colleagues Marlene and Michael for the work they put during the work stream and now with the presentations facilitating the discussion. I also want to start by echoing what Norway and France said, and particularly on point M, we think it is important to address this subject. as a way to capacity building for tax administrations to access to transfer pricing databases. And as a side note, that can also open the door for many tax administrations that don't have the governments don't have put in place a transfer pressing legislation and maybe this is the incentive they need to start thinking about it. And letter M we talk about UN managed database but also on the COILIT's concept notes we talk about another alternative proposal pooled purchasing and we think that will be most advantage why because we could negotiate in group that would give us leverage and we'll have a reduction of the the subscription costs for all parties involved and even on the on the protocol as we're speaking it will be more efficient and we have time constraints and this would allow to solve the issue in a favorable way. Unlike the UN managed database that as we all refer here, it raises complex questions of financial implications, management responsibilities, and it is what we have to say about it. Thank you.

Thank you, Portugal. We continue with Singapore.

Thank you, colleague.

On question M, we agree that access to transfer pricing databases is an area that member states can continue exploring to facilitate transfer pricing analysis and therefore increase the effectiveness of dispute resolution and prevention. Obviously, this would have to be done in a demand-led, cost-effective manner with proper safeguards to preserve taxpayer data confidentiality and integrity. On M, we would agree with previous speakers, including Frans, as the transfer pricing outcome of each MAP or APA case depends on specific facts and circumstances, and may not be generally applicable, such a database might not be useful across, for all member states. And another issue which has been raised previously is of course that of taxpayer confidentiality. And so given the above, we think a cost and benefit analysis may be necessary to ascertain whether further work on such a database should be pursued. And for now, our sense is that it is probably not necessary. Thank you.

Thank you. Singapore, Russian Federation.

Thank you. Thank you so much, co-lead. I'm going to speak Russian. Now, I would like to start by apologizing for a fairly lengthy statement, but I won't take the floor after that. Now, regarding little M, we back the idea of the creation of databases in terms of transfer pricing, one under the age of the UN. Our position on the following questions is the following, financial consequences. Now, expenditures might be necessary to create a database of enterprises actions and the creation of IT platforms with access to tax administration authorities around the world. To finance this, we could look at a sharing, a fair sharing of contributions between member states with perhaps certain advantages for developing states. Another alternative source of financing could be voluntary contributions or contributions from enterprises. To ensure that it is sustainable, it has to be built up in stages. We can start with a pilot project in separate regions or sectors to identify shortcomings and then we could fine tune it. It is important to provide for long-term financing to update the databases. Otherwise, there is a risk that the data might soon find itself outdated. An alternative here would be the purchase of commercial databases. If the creation of a full-fledged UN database would take too long, would be too expensive, we could concentrate on the pooled purchase of commercial databases. Turning now to the issue of the management of these databases and the allocation of responsibilities, the operation should be taken up by a specialized UN body in cooperation with enterprises. It would cover the collection of data, quality monitoring, the IT systems and so forth. The management should possess the necessary expert expertise and IT expertise to ensure that access is easy and convenient. There will have to be a set of criteria for access to the database, including validation of access. Turning now to the participation of Member States. We have to note that states have a dual role here. They might be the ones who provide the data, but also users of this data. Theoretically speaking, countries could provide anonymized data within their jurisdictions, for example, aggregated databases to enrich the databases, especially on the various regions and spheres of activity which are not covered by commercial databases. We should focus on the data which we already have, state data that we already have. We should clearly determine what the right of access is. We believe that all parties should have equal access when it comes to the administration of tax disputes. and tax processes. States should also participate in key decisions regarding the use of databases, such as for example, the expansion of their scope. And we could move from the transfer pricing databases to greater databases. We also consider it useful to conduct regular surveys and to have a feedback system to ensure that we are aware of any problems that arise from the use of these databases. If the databases are funded with state funds, then the Member States have a right to enjoy reports, annual reports regarding the use of these databases. For example, if it reads to increased revenue. Concerning confidentiality and data confidentiality and integrity. The level of confidentiality will to a large extent depend on the sensitivity of the data in the database. If these are public data or commercially available data, this should be in keeping with existing procedures. In those cases where information is more sensitive in nature, for example, because it is provided by the state, then there has to be a fine-tuned access procedure when it comes to the use of such data. similar to existing standards in the field of data information sharing. Now I'd like to move on to question n, little n. Now in our view, a database which would aggregate information regarding APAs and data confidentiality and integrity procedures could be useful. APAs and MAPs. It could include sectors, including types of operations that have been agreed on, for example, which types of transfer pricing mechanisms have agreed upon, and also critical shortcomings. Such an exchange of information could assist tax administrations in cooperating. Of course, a database must provide for anonymity of the data and disaggregated data. There could be a short case summary which would describe a situation and the resolution without informing anyone of the identity of the taxpayer. Furthermore, the function of such a database could also include monitoring existing and finalised cases. There could also be typology regarding disputes which arise within the framework of mutually agreed procedures, for example, we have already seen how many disputes have arisen regarding transfer pricing and tax residency and so forth. How many cases have been resolved as part of these procedures and so forth. So the OECD is already compiling such data and publishes it on an annual basis. This is available to its member states and a number of other states, but a database under the auspices of the United Nations could lend additional quality to existing data. For example, as already said, we could share a summary of cases that have been concluded and we could also look at systemic patterns of problems. If we focus also, if it's focused on a specific article of the Convention, then this is probably an indication that we need to fine tune those articles. We would also recommend a staggered approach starting with a pilot project, for example, we could look at natural resources and so forth, and then we could expand it to other sectors. Thank you so much.

Thank you, Rasha. On the question, and I am taking it back a little bit. I hear concerns that the data may not be meaningful or not like generally meaningful or that it may not be broadly transferable to individual cases or might be short-lived in terms of lifespan. I'm taking it back a little bit because as the Russian delegate just highlighted, to some extent we are already familiar with exchange of information to this very end. So there is a question, or the core question is whether we can do something to improve the current situation. And there's a saying, a bird in the hand is worth two in the bush. So in Germany, we would translate it a little bit differently. But the meaning is that maybe it is necessary for us to also strive for smaller improvements, which may still be valuable. instead of chasing something too ambitious that we cannot reach eventually. With that, I want to give the floor now to China.

Thank you, Colette. First, I would like to say that we share most of the comments made earlier by the delegates from Singapore and Norway. And for the question, the first one, we also think that maybe the like comparables is one of the greatest change we always facing upon the provision and resolution of tax disputes, especially upon the transfer pricing issues, right? And we just think that if we try to build a new, totally new database, maybe to put it as it stated in the draft, right, as a potential UN managed database, They're still very challenging, I think, uh, in terms of, uh, uh, not only… the source and quality of data, but also cost governance, confidentiality, et cetera. And in this regard, we also think that it may be much more practical and effective for the member states in need to consider the alternative proposals in the concept note, like the pooled purchasing or coordinated arrangements upon existing databases. should be much more practical, I think. And for the second question, we also think that for the settled APA and MAB cases, bilateral APA and MAB cases, we need to say that every case is settled on a case-by-case basis, right? And every case has its specific background and this may be, may not be applicable to other cases directly as our concern. And the other concern about the question is that usually in the agreement of MAP and APA bilateral or multilateral APAs, we will confirm that by the both tax authorities, we cannot disclose any kind of any information about the APAL map without the consent of the other party or the taxpayers, that should be also challenging point for us to explore this. That's our opinion. Thank you.

Thank you, China. The floor goes now to India.

Thank you, Kooli. We welcome the IMC's effort to reduce information asymmetries in transfer pricing. However, these must be explored carefully and transparently because here we are trying to build a UN database, but the goal should not be to impose a single database, but to broaden the access and reduce disparities supporting all member states in applying the transfer pricing rules effectively. On the point on the type of databases that could be considered like a bilateral APN map cases, There is a concern that the many jurisdictions including India operate under strict domestic firewalls governing the confidentiality of APA and MAP proceedings which actually legally prohibit the disclosure of taxpayer specific information to any external or multilateral database. So any system envisaged by the committee must therefore respect the statutory constraints and avoid requiring the sharing of protected APA and map data.

Thank you.

Thank you, India. So we have no more member states asking for the floor. And with that, I give the floor to Zambia, who just raised its hand. Zambia, please.

Thank you so much, Walid. So we also equally support efforts to come up with a database that will be accessible because obviously improving access to transfer pricing information will help to reduce the asymmetries and obviously also contribute towards the prevention and resolution of tax disputes. We also take note of I think the proposed approaches that can be taken, of course we note that one of them is obviously the creation of a public UN transfer pricing database accessible to all countries. But in this regard, we also take cognizance of the comment that came from Norway, perhaps in view of the fact that these databases require constant updates. So then perhaps the cost associated with all those activities perhaps might also be considered. And obviously with that having been taken into account, a pooled purchasing of a database might appear to be a more cost effective approach. Notwithstanding and without prejudice to this position, Chair, I think our main concern is that we believe that even by providing this access to the TP database, we won't really be dealing with some of the issues that have been, I think, raised with regards to the databases. And this has to do with the availability of data. I think all the databases available, the major concern that has been coming up relates to the limited data that is available on those databases. Particularly speaking on behalf of Africa, data relating to the circumstances that at least apply to our African scenario, our African environment is very limited. We have very limited comparables coming from Africa. And as a result of that, even in our application of transfer pricing principles during our benchmarks, certain times, in fact often, the databases seem not to be very helpful. And based on that, we believe that focus must also be, focus must also be, I think dedicated towards enhancing transparency, ensuring that data is available within jurisdictions. You will agree with me, Chair, that most of these databases contain information coming from the north. because those jurisdictions have made the deliberate effort to make that information available. But that is not the case, I think, particularly in Africa, where that information is not available and as a result cannot be found on these databases. And because of the confidentiality issues, to the extent that that information is not publicly available, there is no way that this information can actually be found on those databases. So perhaps that's one of the issues that we should also consider to go hand in hand with the proposal to provide access to the public databases, enhancing transparency within jurisdictions to ensure that information about these companies is made publicly available so that it can be accessed by these databases and as such can also be used for transfer pricing analysis. In terms of point N, we agree with the position from Russia to the effect that indeed it would be very useful to have information about the bilateral APAs or MAP cases so that other jurisdictions can also benefit from the outcomes over these measures as applied by other jurisdictions. Thank you, Chair.

Thank you, Zimbabwe. I seem to have triggered something with my threat to close the floor. I keep that in mind for later. We continue with Algeria, followed by Kenya and Uganda. Algeria, please.

Thank you, Chair. We support what's been said in the room. and commend all the efforts made in the context of the work streams for the Framework Convention and Second Protocol on issues of asymmetry in terms of accessing information. Indeed, accessing databases is an essential issue, and in particular for developing countries who don't necessarily have access to these due to exorbitant costs. also due to issues of coverage in certain regions. For example, this was noted by our Zambian colleague. So indeed, the creation of a database within the UN would be very interesting and we would be very in favour of it. Whatever the approach decided upon, whether that's within the UN or making use of existing mechanisms, whatever the approach chosen, within the context of this work, we have to take into account the support required for developing countries. These countries often have difficulties in accessing databases, in particular when it comes to costs, but also in relation to the availability of coverage and the availability of information. On the issue of whether we could integrate data on APAs or MAP, we think that this data would be very interesting to include. Why? Because it would allow states to facilitate an analysis of the data and APAs. It would enable decision making on taxation amounts. It would also enable us to settle disputes. These databases could also enable us to highlight issues which are recurring and through these recurring issues we could then identify guidelines or capacity building which could be implemented in order to work on those recurring issues and resolve them. So for all these reasons we believe that strengthening access to databases is a very important issue and this will guarantee the effectiveness of international tax cooperation. Thank you.

Thank you. Next is Kenya. Kenya, please.

Good morning, Chair, colleagues, Secretariat. I think we've heeded to your threats and we have to put across a few comments. First, I would like to recognize the importance of databases, that databases, especially when you're dealing with cross-border transactions, it is important that you have at least comparables to that effect. My thinking, the main reason why would have potentially the UN manage the databases is to try and elevate the sacrosanct effect of the UN as a body in terms of handling the database. We are coming from a point, and I think quite a number of member states have mentioned, We are coming from a point where the databases that exist are a bit skewed, albeit not deliberate, but because of maybe the reporting frameworks that exist. So you find quite a number of commercial databases are heavily skewed towards a particular region. So to actually get comparables that can enable you effectuate a proper comparability analysis, for example, becomes a bit difficult. So one of the thing is If we are to have a UN managed database, then we need to have a database that looks at the circumstances, the conditions that suit an array or a myriad of transactions and entities. Then on the other thing, that I would also wish to mention would be on access to these particular databases. For quite a number of developing countries, and I think that's the reason why we put the issue of financial implication as we had discussed earlier, is accessing these databases is quite a big challenge. And so that should be put into perspective when we are trying to see where this particular discussion will be housed, especially within the framework and not addressed in one particular protocol. And then there's also the issue of safeguards. for data confidentiality and integrity. And that's the reason why we believe that if it's housed under the UN, then the database would have the integrity that is imagined. Then when we look at letter N, you realize that we are having two issues there. We have bilateral APAs and we have MAP cases. From a domestic perspective, if you look at how bilateral APAs are drafted, there are quite a number of things that speak to privity of contract and privacy of contracts. One main issue, if you look at our domestic law and what you're trying to put across is the critical assumptions that you come up with when you're drafting or you're coming up with the bilateral APAs. So I would imagine if we are speaking to having databases that constitute bilateral APAs, what would that, what effect would that have in the critical assumptions that have been put in place within those specific bilateral APAs? That is one. Two, if you again look at the, the how we've crafted our domestic law, such kind of APAs are not to be used by any other taxpayer for that matter and the commissioner. So the question of confidentiality comes in to an effect that you cannot use the bilateral APLs elsewhere apart from either question of reporting numbers, how many APAs have been done within a particular period. So from our end, it might be difficult to have compilation of bilateral APAs as a database map so that the same can be used by others for purposes of comparability. Thank you, Chair, I submit.

Thank you, Kenya, for your intervention. The floor goes now to Uganda.

Thank you, colleague, for the opportunity to speak on these two issues.

We largely concur with the submissions of Russia, Zambia, and Kenya. On the question of the UN managed database, we think that it's a good idea. And more specifically, it would be good that the structure in place to manage this database works with states, member states, including.

The regional economic groupings to leverage their data collection and management infrastructure.

Second, on N, we think that it probably would be a good idea to include court decisions in the databases which are compiled because this helps to enable some of our jurisdictions to leverage some of those principles established in those decisions.

Now on the question of confidentiality of.

Bilateral APAs and MAP cases, there was a suggestion from Russia on anonymity of the disclosures in those cases. It would be good to hear from the room whether that would address the concerns on confidentiality in each of those cases.

I submit, Chair.

Thank you, Yukandar. Our next speaker is from Bangladesh.

Thank you.

Thank you, colleague.

We think to mitigate tax disputes, a central database is most important. And that would be UN managed database, it is very good to hear. We think tax transparency is as well as necessary for every country. We think it ensures all countries have access to beneficial ownership information to detect and prevent tax evasion, corruption, money laundering and illicit enrichment.

We think central beneficial ownership registers publicly accessible or accessible to competent authorities.

At lastly, we tell that we can accommodate confidentiality safeguards but not restriction.

That block lawful access to information.

Thank you.

Thank you, Bangladesh. The floor goes now to the Islamic Republic of Iran.

Thank you, colleague. The Islamic Republic of Iran supports international affairs aimed at reducing information asymmetries and straightening capacity building. However, Iran cannot endorse any UN managed database that require the sharing of API map data or confidential taxpayer information. Confidentiality, national sovereignty, and the specific needs and constraints of developing countries must remain central consideration in this discussion.

Thank you.

Thank you, Iran. Next is Yero Leon.

Thank you. Yeah, thank you, Chair. I'll first of all want to say I support the statements made by Nigeria on this particular issue.

Hello. Yeah. You're back.

Okay, thank you, Chair. Thank you. But on a solid inversion for discussion on these issues, we definitely want to register CILIN's perspective on the two issues. Of course, this reflects our position as a developing country with capacity constraints, limited digital infrastructures and strong interest in transparency, fairness and revenue protection framework. Um, CILLO's perspective on governance arrangements for a united, potential United Nation managed database. CILLO welcome the establishment of UN managed database, especially one supporting transparency, comparability of tax rules and improve administration. But would also like to emphasize several governance, financial and confidentiality conditions. Now governance and the governance structure, CLU supports a governance framework that is inclusive and member driven. Governance must ensure equal participation of developing countries, not only major economies. A steering committee or governance board with balanced representation from regional groups such as Africa, Asia and Pacific, Latin America, et cetera, is also essential. Decision on database scope, data categories, and updates should be taken by member states, not solely by technocrats or donors. Now on transparency and rule base, Sierra Leone would stress clear operational guidelines, defined procedures for data submission, verification, use, and access, and review mechanisms for changes to the database. This ensures predictability for smaller administrations. and the financial implications given limited fiscal space, Sierra Leone argued that development and maintenance should be donor supported. Initial funding should come from voluntary contributions, development partners, and multilateral institutions, exampled UNDP. A dedicated funding window for capacity building should accompany the database. and to avoid mandatory contributions for low-income countries. Sri Lanka opposed any requirement for low-income states to finance the database. Optional contributions should be allowed but not expected. On the management of responsibilities, Sri Lanka supports management under the UN Secretariat, example financing for Sustainable Development Office, with technical operation delegated to a specialized tax data unit, clear reporting obligations to member states, annual audit and performance review. Capacity support for developing country tax authority should also be integrated. On participation of member states, CILIN supports open participation with tiered access, public sections versus confidential sections, example detailed tax rulings and policy drafts. Support for developing countries to gather and upload data. Periodic consultation workshop to ensure the platform remains relevant. On safeguards for confidentiality and data integrity. Given the sensitivity of taxpayer information, CIO emphasizes strong confidentiality protocols, adherence to global data protection standards, proper anonymization of taxpayer information, explicit prohibition on sharing commercially sensitive or taxpayer identifiable data. Cyber security measures, CIO expects encryption datas, strict access controls, audit trails for all data retrieval. On the legal agreements, clear data sharing agreements, defining rights, obligations and liability for breaches. Our overall position is that we are supportive but require strict confidentiality, safeguards, equitable governance, donor finance capacity support, and protection of small countries' interests. On the end question for discussion on the floor, we generally support exploring additional database time, but with limitations. Database on bilateral advanced pricing agreements Potential benefits that Sierra Leone sees is that this could assist countries with limited experience in APA negotiation. It would also provide access to comparable comparative data, helping Sierra Leone align transfer pricing practices with global norms. It would also strengthen transparency around cross-border pricing and reduce profit shifting risks.

What's?

Is the CILN concern on this. APAs often contain highly confidential taxpayer information. CILN insists on full anonymization. Only high-level summaries, example, sectors or methodologies, types of transactions. No disclosure of specific margins or company identities. Though CILN supports a summary level APA database, not one containing detail or sensitive arrangements. On database on mutual agreement procedures cases, a potential benefit that Sierra Leone is looking to is that APA, I mean, a map database could help Sierra Leone benchmark its treaty interpretation practices. It could also improve dispute resolution capacity and it could identify a current treaty abuse patterns. What is CILO concern? Map cases often involve sensitive treaty positions. Disclosure of negotiation strategies may weaken a developing country's bargaining power. CILO preferred approach. CILO supports aggregate statistics, example numbers of cases, issues involved, resolution time, anonymized summaries of common issues and guidance notes showing best practices. CLN is opposed to disclosure of specific negotiation positions, information that could influence pending or future MAP negotiations. Other possible database CLN might support, treaty metadata, defining of permanent establishments, withholding tax rates, tax incentives and exemptions to strengthen reforms discussions, domestic transfer pricing legislation and administrative practices, Commodity pricing benchmark are important for natural resource taxation. So these benefits low capacity countries without compromising confidentiality. Thank you, Chair.

Thank you, Sierra Leone. Morocco, please.

Thank you, Khalid. We recognize the critical importance of addressing information asymmetries through improved access to databases, However, we emphasize that any UN managed database must be carefully designed to be sustainable, effective and accessible. We should consider on financial implication the costs to consider initial database development and population, ongoing data collection and updates, quality control and verification. On management responsibilities, we think that a technical advisory committee should be done. On data contribution, maybe a voluntary submission of comparable data is to be considered. On governance, should we have a member state oversight committee with regular reports on database performance and approval of major changes? as highlighted by many countries, we need to have confidentiality measures. Strict anonymization of company data is essential, access controls and use and user identification and confidentiality agreements for users. Thank you so much.

Thank you, Morocco. Um, our, our next member state And I would also, I guess our last member state taking the floor is Algeria.

Thank you so much, sir. I just wanted to speak to complement what I said earlier on. It's absolutely true that we did not present our position regarding confidentiality. So it is very important to ensure that the compilation and access to data is carried out in a way which respects the requirements in terms of confidentiality. So one has to identify what information can be shared, for example, as what was proposed by the Russian Federation. Thank you so much, sir.

Thank you, Ajira. I give now opportunity to the stakeholders to contribute to our discussion. And we begin with BCAS.

Thank you, colleague, for the opportunity. In our opinion, the idea of UN managed database can be explored. However, strict data security and confidentiality should be ensured for sensitive information pertaining to taxpayers. It may be a good idea to obtain taxpayers approval before sharing their details. Databases for the bilateral APA and map should maintain full confidentiality without taxpayers details and respecting countries domestic laws on sharing of such information. Such database could contain only principles or the core issues without revealing business secrets on a positive note. Such broad databases can guide taxpayers or countries about the prospects of resolving their tax disputes as well as country specific stands on a particular issue. Also they may act like a guide without laying out any formal precedence. Countries can also consider on bilateral agreement for acceptable margins for the related party transaction in specific industries. to reduce transfer pricing related disputes. Thank you very much for the opportunity.

Thank you, BCIS. Next is Third World Network.

Thank you, Colleen. I speak on behalf of Third World Network, Tax and Fiscal Justice Asia, and the Global Alliance for Tax Justice. On the question of transfer pricing database, We find this approach problematic as it continues to be a solution that is based on the use of transfer pricing, including comparable profit method and comparable uncontrolled price method. MNCs and their related entities use tax planning techniques to attain tax optimization, typically effective tax rates of not more than 1%, far less than what ordinary workers pay. Many tax planning techniques are turbocharged by transfer pricing methods, which the tax authorities have to deal with through ever-changing measures, which are even made more complicated by rapid technological developments. Transfer pricing incentivizes the use of intangible property migration. where for no apparent business purpose, the IP, which is increasingly important in a digitalized economy, is migrated to a tax haven so royalties could be paid for relatively little or no tax at all. Also, talking about comparables, we ask, what is the proper valuation of the intangible property at the time of transfer? How much should the transferor or the parent corporation charge to the transferee? What is the basis for the pricing of the royalties when the transferee allows a third party to use the IP? This becomes even more complicated in cases where the third party turns out to be yet again another related entity. Given the flux in technology, services and business models in an increasingly digitalized economy, we cannot simply rely on a TP database. Developing countries may not have them, even as they are at different stages of economic development and technological endowment. Furthermore, they say that data is the new oil. How can we determine the proper valuation of assets that consist of data gathered from different sources and through different methods? With what comparable transactions or similar assets will we compare a set of data when comparable data was collected using different methods, another business model, and from entirely different sources. What we actually have is a made-up industry called transfer pricing, whose issues are resolved by economists, accountants and lawyers whose vital services are badly needed elsewhere. Their services should not be wasted in solving imaginary issues at the altar of tax optimization, which translates into veritable wealth transfer from the working people to the corporations, their shareholders, including billionaires. It is also a wealth transfer from developing countries to rich countries. This manufactured problem entails additional expenses to be passed on to consumers, mostly ordinary folks. Thus, we have to do away with transfer pricing. In its place, we need a unitary tax system with formular apportionment, as this will make moot and academic the prices charged by an MNC and their related entities to each other. Under a unitary tax system, all of them will be treated as a single entity where all revenues and all expenses of each of the supposedly separate entities will be accounted for in one income statement and where the taxable income will then be assigned to different jurisdictions based on a fair formulary apportionment that is reflective of actual economic activity in each jurisdiction. This will be aided by the annual disclosure to public country by country reports. Finally, it is clear to us that transfer pricing will certainly make the work on prevention and resolution of tax disputes even more difficult. We suspect that if we throw in the issue of controlled foreign corporations and sourcing rules of the different tax jurisdictions, the problem becomes even more complicated. Thank you.

Thank you, Third World Network. Now we give the floor to the Africa Tax Administration Forum.

Thank you, colleagues. I think this is a very important issue, first and foremost, and we want to start by saying that Information asymmetry is one of the critical challenges in transfer pricing and international tax audits, and therefore the fundamental issue that we need to address here is access to the information, including through exchange of information and obviously ensuring that there is effective exchange of country by country reporting. And this can also be supplemented by having robust and very effective domestic transfer pricing documentation rules in member states and so these issues about information needs to be put together as part of the capacity building initiative under the framework convention and actually they are very important. We say that because commercial databases are only relevant after a transfer pricing analysis have been done and there is a process of accurate delineation and you can determine that you can use a transfer pricing database to price accurately delineated transaction and therefore there are some situations where you find actually what you need is a proper information and you can use alternative methodologies as opposed just using the commercial database. They have some benefits though and therefore we welcome the idea of the UN considering this and therefore UN can play a role of a centralized purchasing of these kind of databases, but I think it's also important to underscore the contribution of regional organizations such as ETSAF and others that can assist in coordinating effective use and also ensuring that member states are also well capacitated to benefit from such databases. I also want to close my intervention by saying the point made by Zambia is also very important to take into account. That is not just having commercial database, but is ensuring that the data sets represents the economic realities of the country or the region. And so one of the fundamental thing we need to think about is how the UN and other international organizations and governments in member states can start thinking about developing requirements are in place in their respective countries for data sets to be made publicly available, particularly on the continent here in Africa where such information is quite limited, that will be some important consideration to put in, to keep in mind. Thank you.

Thank you, Atif. Our next speaker is from the International Air Transport Association.

Thank you, Co-Lead.

IATA speaks on behalf of the global airline industry. We align ourselves with the concerns expressed by several states

and stakeholders regarding the confidentiality and integrity of data within any potential UN managed transfer pricing database.

Taxpayers confidentiality is a fundamental right

preserved in domestic legislation and recognized in the OECD Model Tax Convention.

Transfer pricing data is particularly sensitive, containing commercially confidential information about business strategies, pricing and profit margins that could severely harm

competitive positions if disclosed.

Before discussing governance, critical questions remain unanswered.

What information would be included? Who would have access, tax authorities only or others?

For what purposes specifically could it be used?

Also, not less important, is what limits would prevent misuse?

These uncertainties are not theoretical. In our sector, which is highly regulated from a competition law standpoint and where commercial margins are tight, unclear data use boundaries pose real risks. Without safeguards, taxpayers will lose confidence in the system, undermining both compliance and the dispute prevention objectives these work streams seeks to achieve.

Thank you, colleague.

Thank you. South Centre, please.

Thank you, colleague. The South Centre strongly supports the establishment of a UN transfer pricing database that is accessible to all members. These will resolve the longstanding problems of developing countries in accessing databases and finding comparables for transfer pricing, and it will help prevent disputes before they occur and to resolve them effectively when they occur. On the financing, members can contribute to building the database, e.g. or for example through using domestic corporate registries to feed into the global database and also make financial contributions depending on their capabilities for its maintenance. The protocol can provide guidance for data collection for databases and safeguards for confidentiality and integrity. It can guide on how to anonymize the data for incorporation in the database as already proposed by members. I thank you.

Thank you, South Centre. So there are no further requests for the floor. With that, no there are. So I give the floor now to the African Union while I look up the other one. African Union please.

Thank you chair for giving us the floor. We want to weigh in a bit on the case issues around databases. We know that access to information is crucial to case management and also both dispute prevention and also resolution. However, as pointed out by many of our members, it's not enough to have a database. What matters is what information are in those databases and how relevant are they to our member states, reflecting the economic realities of our practices, which sometimes will mean that some of us do not have experience in transfer pricing and related matters. Chair, we also want to point out that looking at the MAP statistics, over 50% of cases emanating, involving cross border dispute are from transfer pricing. And that takes us a bit back to all that discussion we have had as a follow up to this very discussion. and we want to encourage members that as we go into detailed development of substantive tax rules in other protocol, we should also weigh options that are not necessarily tied to arm's length principle and then transfer pricing rules generally as a way of minimizing dispute. Having said that, Chair, we also want to weigh in on some things that have been mentioned by our members. around making some of this data open, the ones that can be open. Mention has been made of public country by country reporting, for instance, which we know could be used in high level of reference, have made mention of the need to also have a future protocol, I think it's Article 17 of the TOR, to have a future protocol and exchange of information. So we should begin to also look at how far we are going to go in entrenching data and data related commitment under this protocol and how such commitment or trajectory is going to impact on the future protocol and information exchange for tax purposes. We say this because at the end, we do not want to make this whole protocol about transfer pricing and data sharing. when in the future we will be constrained to have another protocol possibly on information exchange. We thank you, Chair, for the opportunity to come back on this one.

I thank the African Union for this input. The floor is now for the use for tax justice network.

Thank you, Chair, for the opportunity to weigh in on the two critical issues. that we are presently deliberating on. My name is Lorie from the Youth for Tax Justice Network. And as I speak, please note that my submission is more or less an invitation for reflection for all the stakeholders that we have in the room, all the way from the member states and the work stream three committee to youth representatives and civil society. So first is to acknowledge that the Youth for Tax Justice Network welcomes the idea of a UN managed database. and other complementary databases. The reason for this is because they play an integral role in ensuring effective global tax governance and international cooperation. So let's go through this together. Let's begin with clause M. So as the committee considers the governance architecture of this potential UN managed database, it would be very useful to take a comprehensive view spanning the key issues that have been written there, all the way from financial implications to what oversight will look like, what data governance in this case will look like, participation and even long-term sustainability. So on the financial implication side of things, we note that a robust global database demands very stable and multi-year financing. So member states could potentially explore various concepts in this case when it comes to financing. And I'm thinking of this in terms of also the conversation that we were having last week on critical questions of what financing within the entire convention will look like. So will this be hybrid financing models which combine assessed contributions with voluntary funds to probably just reduce some kind of reliance on any single source of financing? Will this look like cost sharing with regional tax organizations that already exist and are heavily weighing into the conversation around global tax governance? And this would be very critical, especially for the data gathering phases. And then the third part to really think about critically is, is this going to be happening in phased rollouts? Will it start with pilot countries and then expand to global participation as capacity grows over the years? And then the second part is really about management responsibilities and oversight. So we note that clear delineation of roles will strengthen a lot of credibility within the conversation of what this particular databases will look like. So key questions we have to the committee really and to all the stakeholders is which UN entity will manage the daily operations of this particular database? How then will responsibilities be divided between data submission, validation, analysis, and even publication? Should some kind of independent technical advisory panel be established to guarantee some kind of neutrality in this case? It is something that we need to think about in this conversation. And beyond this is would a regional co-chairing model where every region participates in oversight play a role in ensuring the institutionalization of this particular database. And then if you look at the conversations we've been having, we've also been talking a lot about the COP, which is critical in the conversation that we're trying to have. So how do we see their role coming into play within the consolidation and overall management of the databases? Now when we move on to clause N, which is exploring whether other types of databases could be considered, for us we're really thinking about it in terms of one, data governance, we note that the question of transparency and accessibility comes strongly into play here, especially for countries in the global south. And as mentioned by ATAF and other countries as well, we have seen that information asymmetry is one of the key barriers to successful institutionalizations of very many complementary and supplementary databases that exist within the frame of tax cooperation. So at that point, how do we reconcile this particular issue within this conversation? And then how do we also reconcile the confidentiality clauses within elements such as APAs and transparency in this particular UN managed database that we're thinking about? And how do we also think about this in the frame of the various domestic laws that we have? And then the other critical question is how do we reconcile state managed beneficial ownership databases that we've seen ourselves talk about a lot, with this particular database that we're trying to bring on board. And then the last part of my submission is really about the development realities, which really have direct implications on data collection, analysis, packaging, and really just how we're looking at how data has been playing out within the idea of tax dispute resolution and prevention in itself. So beyond this is to also recognize that there have been a lot of data gaps in various countries, especially least developing countries. So how then is that factored in the institutionalization of this particular database? What do you see that as and how do we ensure that these realities are factored in the design of this database, its institutionalization in any other part that makes sure that this database works effectively for global tax governance and international cooperation? Thank you, Chair. I submit.

Thank you. There are no more floor requests. With that, we have reached the end of the work package that we have had set for this session. Since Monday, we have received a wide range of input. In some areas, we had growing growing convergence in other areas, there are probably divergences more remaining or became even more visible. We must not let ourselves get discouraged by that. I am very confident that together we're going to make -- continue making progress in the weeks ahead. So I kindly ask the Secretariat to flip to the last slide. Exactly. So thank you. Speaking also on behalf of my colleague Marlene, it goes to you. Thank you so much for your active engagement and all the valuable contributions. And with that, I hand over to the chair.

Thank you, Michael. And also sending thanks to Marlene and also for Daniel and Lisa for all the work they did. and making this session very useful for everyone. And I would like also to thank, before we turn to the formal mode, I would like in an informal way to thank you out of my heart for being here with this spirit and with this open minds for negotiation, which I see like a big difference. from even before. I wish this will continue and we work and cooperate more and more in the future sessions. So I would like to thank you all again deeply from my heart and for everything and for all the side talks we have and useful bilaterals that we did together and even the side events that we enjoyed also together. So And I think now it's time to closing this session. So we are going to end the informal meeting and convert to a formal mode. So this meeting is closed. So the second plenary meeting of the committee is called to order. Now I'm giving my closing remarks. Excellencies, distinguished delegates, dear colleagues, As we conclude this session of the Intergovernmental Negotiating Committee on the Framework Convention on International Tax Cooperation, I want to express my profound appreciation to each of you member states, stakeholders, for their dedication, technical precision, and collaborative spirit you have brought to the table here in Nairobi. This session marked an important moment in our process. We undertook a systematic review of the CoE draft framework convention template and the potential solutions under the second protocol. This session achieved its main objective, providing the inputs needed for the work ahead. We remain firmly on track with our timeline on all areas. Over the past days, we have delved into some of the most complex and sensitive issues in international tax cooperation. Despite the complexity of these topics, we have managed to clearly identify areas of common understanding and equally important, the specific areas where further technical work is most needed to build reposed and fair international rules. We have also reaffirmed that inclusivity remains at the heart of this process, even member states have had the opportunity to contribute from the smallest to the largest delegation. from developed to developing countries, all on an equal footing. Likewise, the participation of civil society, the private sector, academia, and other stakeholders has contributed to enrich our understanding and ensure that a diverse range of perspectives informs our work. As we look forward, the intercessional period from Nairobi to February in New York, the work streams will continue their meetings. The results of these meetings will be new revised documents for work stream one and work stream three and a first version of options note to work stream two. I strongly encourage all delegations to engage intensively in this work as the success of our next session in February in New York will depend heavily on the progress we make in the coming weeks. For stakeholders wishing to participate in the fourth session, information on this process will be announced shortly. and the information will be available on the committee's website and of course for any practical issue you can reach to the secretariat directly. Before we formally close this meeting, allow me also to express my sincere thanks to our co-leads whose steady leadership and tireless preparation have guided us through challenging topics with clarity and balance. My gratitude also goes to the United Nations Secretariat, whose dedication has ensured the smooth functioning of this session. Also to our colleagues in Kenya for allowing us to have this meeting in this wonderful city. And finally, to all delegates, thank you for your commitment, your professionalism, and your unwavering belief in the importance of this process. excellences and dear colleagues, this committee carries historic mandate to lay the foundation for a fair, effective and inclusive international tax system. The progress we have made here in Nairobi brings us one step closer to that goal. I wish you all safe travels and productive intercessional period. I look forward to welcoming you in to New York in February for the fourth session of the committee where we will carry this momentum forward. Thank you all. Now I declare closed the third session of the Intergovernmental Negotiating Committee on the United Nations Framework Convention on International Tax Cooperation. The meeting is adjourned.