(4th meeting) - Fifth Session of the Intergovernmental Negotiating Committee on the UN Framework Convention on International Tax Cooperation (INC Tax) - 3 to 13 August 2026

Welcome back, everyone. I hope you enjoyed your lunch break. So now we're going to continue our discussions for Article 6 for multi-stakeholders. We finished the list of all the member states who requested the floor in the morning session, and now we are left with the list for multi-stakeholders. So now I'm going to hand over the floor to Mr. Daniel, the co-lead of Workstream 1, to resume the discussion for the multi-stakeholders. The floor is yours.

Okay. Okay, thank you, Chair. Before we— I think we have Saudi Arabia, so let's give Saudi Arabia the opportunity, then we continue.

Thank you, Mr. Co-Lead. On Article 6, we agree with the other delegates on the importance of adding a clear definition for high net worth individuals to ensure clarity and consistency. We also support what other delegates mentioned about reconsidering paragraph 2. We agree that the word general needs revisiting. Therefore, to ensure that this article can benefit from information sharing and best practices, building on existing international standards for exchange exchange of information can be the starting point for this cooperation. Lastly, we appreciate the added language in paragraph 3 on respecting the state sovereignty. Additionally, it should also consider respecting each state's national priorities and specific jurisdictional circumstances, especially when it comes to capacities. Thank you.

Okay, thank you. We now move to the African Union, please.

Thank you, co-leads, and thank you, Chair. We align ourselves with the statement delivered earlier by Zambia on behalf of the Africa Group, and we also align with the interventions delivered by Nigeria, Kenya, Morocco, South Africa, Ghana, Burkina Faso, India, Brazil, and Pakistan. We wish to offer support with our observations on Article 6. The taxation of high net worth individuals is a matter of particular importance for African countries. The ability of countries and individuals to organize their assets, income, and economic activities around multiple jurisdictions, frequently through complex legal arrangements, create significant risks for tax evasion, tax avoidance, and tax-related illicit financial flows. These practices erode our domestic tax bases, undermine the integrity and fairness of national tax systems, and then limit the resources available for financing sustainable development and, for Africa, our Agenda 2063. We therefore support the use of clear and binding language requiring state parties cooperate in the taxation of high net worth individuals. In this regard, we support the proposal from the Africa Group that under Article 6, paragraph 1, we propose changing shall cooperate to enhance to shall develop and implement. We also propose under paragraph 2 to delete the general— the word general so that it does not limit the information that is provided in this regard. On paragraph 3, we agree vehemently with the proposal that we adjust the words replace, explore with adopt. We also propose deleting while respecting each state party's sovereign right, as this has been covered under Article 2B of the principles article. With these observations, we support strengthening Article 6 so that it provides practical, inclusive, and effective bases for the taxation of high net worth individuals. I submit, Mr. Chair, and thank you.

Thank you. War on Want, please.

Good afternoon, everyone. I'm speaking on behalf of War on Want and the Global Alliance for Tax Justice. Listening to the conversation this morning, we found the comments of Brazil, Pakistan, Spain, and Zambia on behalf of the Africa Group to be especially interesting and helpful. However, when we look at the state of the article as it stands, we have profound concerns. Paragraph 10 of the Terms of Reference is clear that the Convention should address tax avoidance and evasion by high net worth individuals and ensure their effective taxation in relevant member states. Sadly, the current text will do nothing for this. It has been gutted of ambition and action. Effectively taxing high net worth individuals would mean ending the ludicrous situation whereby billionaires can pay less tax than working people. It would mean ensuring that states can track and tax extreme wealth. It would mean fairly allocating taxing rights across all the countries from which the wealthiest have extracted their fortunes. And it would mean taxing the rich according to their climate debts. Now let's be frank, the current wording won't help governments to do any of this. The language of exploring coordinated approaches is willfully non-committal. The text lacks clear, concrete instruments and obligations, nor does it reflect the substantive contributions of many member states. The fundamental right of states to set their own tax systems relies on international cooperation, and that is especially true when we are talking about the highly mobile and well-resourced super-rich. Finally, and allow me to speak bluntly, delegates, the wealth of the super-rich is growing more and more extreme. We now have the world's first trillionaire. Countries on every continent are struggling to raise the funds they need to fund public services, climate action, and sustainable development, even as extreme wealth inequality is straining the social fabric of many states. We need to create a tax system that allows countries to tax the very, very rich, and this is the place to do it. Thank you.

Thank you. BCES, please.

Thank you, co-lead. Whether an individual qualifies as an HNI or not will depend on various factors such as a level of economic development of a country, the value of home currency, purchasing power of the currency, etc. So it will be extremely difficult to come up with a single definition which is acceptable by all. Accordingly, as against adopting one-size-fits-all approach, each country may have its own definition or its own financial threshold as to who qualifies as an HNI. Thus, Country A, a developing country, may have 10 million as a threshold, and Country B, a developed country, may have 100 million as a threshold. Now, when a request is made by a developing country for sharing information or other cooperation, a definition of a developing country may be adopted, and persons above 10 million may qualify as HNI. And when the developed country makes a request, a $100 million threshold may be adopted. So depending on, you know, from which side the request comes, the threshold may vary. But net-net, one does not have to make an attempt to define what is an HNI. The definition could come from the domestic law. Another aspect, Article 6 does not apply unless an individual qualifies as an HRI. Now, Article 6 should also provide exchange of information to determine whether a person qualifies as an HNI or not. An individual may have hidden the assets or parked the assets in different countries, and whether he is an HNI or not will depend on accumulation of all the data. Accordingly, Article 6 should have a mechanism wherein even before a person is declared as an HNI, to determine whether he qualifies as an HNI, the cooperation among the countries should be possible. Next issue, what coordinated approach for effective taxation of HNI means? What are we talking about? Are we simply talking about just exchange of information, you know, or sharing some techniques to share data, uh, to hide taxes or hide wealth? Or we are talking about something like a minimum taxation of HNIs? Something comparable to Pillar 2, wherein a UTPR kind of a mechanism is introduced, and the country of residence does not levy minimum taxes on the HNI, the taxing right moves from one country to another country to levy taxes. That probably, you know, may achieve a lot of the purpose which we want to achieve by taxing the rich people, including targeting exemptions from capital gains taxation through which the maximum wealth may have been generated. Thank you.

Thank you. ATAF, please.

Thank you very much, Mr. Kohlied, and once again, thank you for the draft. Mr. Kohlied, we'd like to support and align our commentary with that of the Republic of Zambia on behalf of the Africa Group. Fundamentally, Mr. Co-Lead, we feel that we should return to the language as it was in the January draft, particularly because we feel that that language is more prescriptive and directive. And so we do align ourselves with the comments of our fellow African countries. Further, Mr. Co-Lead, I think as we stressed yesterday, We represent countries on the African continent that will be responsible for administering the convention when it comes into play, and so therefore we encourage that we stick to using prescriptive language that is directive in its nature, and that will ensure that the convention is easy. To implement and is workable for developing countries. I thank you, Chair.

Thank you. CFS, please.

Thank you, Colleague, for giving me the floor. With respect to Article 6 as drafted, it has no object. We know who is bound but not whom the obligation is about. There is no definition of a high net worth individual anywhere in the Convention, and perhaps this The intention is that the definition is to be covered under Article 6, paragraph 3, which means you're leaving it to each state party to have their own definition reflecting their domestic considerations, which is very important. However, where an obligation's object is undefined, the obligation set out under Article 6 then cannot be breached. And an obligation that cannot be breached then is not an obligation. So we don't see any positive obligation coming out of Article 6. So the category of high net worth individuals should be defined, and it should not be defined by a common number. For example, a high net worth individual is one who has a million dollars in their account, but rather it should be defined by a common standard that each country will then apply to its own own economy so that a high net worth individual is defined by where the person sits in their own country's wealth distribution or by a multiplier of that country's average income. And we can let the Conference of Parties set the method and update it over time. So my proposal to Article 6 is to add one paragraph to the article stating that— and I'm reading this— For the purpose of this article, a high net worth individual is an individual whose net wealth is exceptional relative to the distribution of wealth in the relevant state party, determined in accordance with the common methodology adopted and periodically updated by the Conference of State Parties. Nothing in this paragraph limits the right of a state party to apply a broader definition under its domestic law. I believe that this inclusion as part of Article 6 gives the review process something to measure, gives Article 6 its object, and respects every country's differences and leaves the discretion in paragraph 3 untouched. Thank you.

Thank you. DM UN Foundation, please.

Thank you very much for the floor. I have the honor to speak on behalf of the Financing for Children and Youth constituency of the Major Group for Children and Youth and its 20,000 organizational members. Mr. Kohlied, children and youth firmly support strengthened international cooperation to eliminate tax avoidance and evasion by high net worth individuals, which compromises valuable domestic public resources that build resilient social security systems that protect the most vulnerable. At the same time, we note with great concern that the current text in several aspects favors discretion and flexibility over binding, resilient, and sustainable solutions, especially considering the fact that the Framework Convention and the Article itself has been created with the explicit purpose of eliminating existing loopholes in the international tax system them, such imprecise language creates opportunity to further expand existing loopholes while creating new ones. If this Convention is to safeguard the domestic resources on which young people and their future generations depend, its provisions on high net worth individuals must be precise, systemic, and binding. In this regard, please allow me to deliver 4 substantive contributions on behalf of children and youth. First, in paragraph 2, as echoed by many distinguished delegations, we call for the deletion of the phrase general, as the existing terminology could indeed be abused to restrict the type of information that is exchanged. Second, also in paragraph 2, we call for the insertion of the phrase on a regular basis so that information sharing systemically strengthens risk assessment and enforcement and particularly for tax administrations and member states in special situations that possess limited technical capacity. Third, in paragraph 3, recalling that the October text read, quote, agree to adopt, end quote, where the current text reads shall explore, we urge for a stronger binding language such as the proposed wording of adopt, or at minimum shall endeavor to develop. We also believe that the final clause on sovereignty of the same article is duplicative, considering the existence of Article 2B, and thereby calls for its consolidation. Finally, pertaining to the definition of the term high net worth individuals, children and youth would also like to call for the creation of a standardized definition in order to guarantee the fair implementation of the Convention's provisions. Mr. Kohlid, children and youth firmly believe that the ensuring effective and universal taxation for high net worth and ultra-high net worth individuals remains an essential imperative and prerequisite for accelerating the SDGs and successfully initiating any post-30 process, especially in our common pursuit of leaving no one behind.

Thank you very much.

Thank you. Now, GIESCR.

Thank you, Chair.

Here we go.

Thank you, Chair. I deliver this intervention on behalf of the Global Initiative for Economic, Social, and Cultural Rights and the civil society network coordinated by the Global Alliance for Tax Justice. At the highest level, Article 6 should clarify that effective taxation of high net worth individuals contributes to: a) reducing inequalities within and among parties, including the fair allocation of taxing rights; Promoting progressive global tax systems. Strengthening domestic resource mobilization. Mobilizing public resources for development, environmental, and climate priorities. This is consistent with the Terms of Reference, paragraph 7.c, and the FFD outcome document that explicitly links progressive taxation and the integration of undeclared wealth to the achievement of the SDGs and domestic resource mobilization. It is also consistent with the Bakutu-Belém Roadmap spanning from the UNFCCC that identifies taxation of high net worth individuals as a potential source of concessional climate finance. Article 6 seeks to address extreme wealth concentration and is essential to tackling global inequality, tax avoidance, and the escalating climate crisis. Recent findings from a Greenpeace report demonstrate that the global top 0.01% of of ultra-high net worth individuals are responsible for the equivalent of nearly $1 trillion annually in ownership-based climate debt through carbon-intensive capital holdings and investment portfolios. In this light, the watering down of the Article 6 text, weakening obligations on countries to deliver tangible action, is completely out of step with the urgency of the global inequality and climate crisis. Since the last negotiations in February, the world has seen the arrival of its first trillionaire, wealth that goes largely untaxed while more and more communities are experiencing a cost-of-living crisis and many Global South countries move further into the existential threat of unsustainable debt. We therefore propose that Article 6, paragraph 1 reverts to the language in the previous draft. At a minimum, parties should be required to develop and implement measures rather than just cooperate to enhance them. As alluded to by previous interventions, the mandate of the COP to periodically review the implementation and effectiveness of taxing rights would ensure the commitment of states. Additionally, Article 6 should be strengthened through a commitment to a global minimum standard on taxing extreme wealth, including progressively higher tax rates for high net worth individuals. All of this with international coordination to ensure it is successful. At the end of the day, bolder international coordination on taxing extreme wealth is not only necessary due to international investments and activities of the super-rich, It is also an enormous chance to mobilize significant revenues for sustainable development. Delegates, we wholeheartedly urge you not to miss this opportunity. Thank you.

Thank you. Okay, so we have stakeholder 3, please.

Thank you, co-lead. I speak on behalf of the Kenya Human Rights Commission and the African Civil Society Working Group on the UN Tax Convention. We are happy to hear that the comments made by Brazil and also Zambia, among other states, and we largely echo their sentiments. Co-lead, we wish to submit that the current iteration of the convention provides for this cooperation in 3 ways. First, states are mandated to cooperate to enhance measures to detect, deter, and prevent tax avoidance and evasion by high net worth individuals. This represents a weakening of the commitment of states, which was previously to develop and implement these measures. Secondly, states are mandated to share general information regarding structures and techniques used by high net worth individuals and to avoid and evade taxes. Again, this weakens the commitment under this article by only requiring states to share general information rather than all information that countries need to tax effectively. Finally, states are mandated to explore coordinated approaches to ensuring effective taxation of high net worth individuals while respecting each state party's sovereign right to determine the design, structure and also level of taxation within its national tax system. We support the deletion of this part of the sentence that refers to national sovereignty. Again, this constrains the commitment to cooperate by referring to national sovereignty. Contrary to some of the statements made by some member states, the purpose of Article 6 is actually to enhance the national sovereignty over the taxes owed by high net worth individuals. It is clear that it is only through international cooperation that we can effectively tax the high net worth individuals. We have further written proposals on text that we feel would operationalize these commitments, particularly in reference to global minimum taxation, a global asset registry, exchange of information, among others, and we are happy to share the same. Lastly, we underscore that the effective taxation of high net worth individuals is critical and must be done in a manner coordinated to promote progress— progressivity, raise revenues, reduce inequality, combat tax abuse, support human rights, and enable countries, especially in the Global South, to finance sustainable development. I submit. Thank you.

Okay, thank you. Okay, we have stakeholder 1, please.

As the president of the Fradelance Foundation, my name is Farah Lee Nadelance. I'm honored to participate in this session. I believe international tax cooperation is about more than revenue. It is about creating opportunities for people. Fair, transparent, and accountable financing allows governments to invest in education, healthcare, mental health, women's empowerment, and sustainable development goals. Tax justice is social justice. When countries have resources they deserve, communities thrive. Priorities for Haiti— I come from Haiti— strengthen domestic resources mobilization, invest in quality education that we have— we need now, and public health, which is a global issue. Expand maternal and mental health services, support youth employment, entrepreneurship, and innovation, build resilient institutions through transparency and accountability. Ensure public investment benefits women and girls. Promote girls' education, expand women's economic empowerment, increase access to reproductive, maternal, and mental health services. Support women entrepreneurs and leadership that we need right now. Youth and innovation. Invest in digital literacy, AI, robotics, and STEM education. Create opportunities for young entrepreneurs. Strengthen public-private partnerships for youth development. Mental health. As an MPH, I think it is important to include mental health in national development priorities. Promote trauma-informed care. Expand school-based and mental and maternal mental health programs, and global partnership encourage collaboration among government, UN agencies, NGOs, academia, and the private sector support knowledge sharing and technical assistance for development countries developing countries. And the policy proposals it is increase. Technical support for developing countries to strengthen tax administration, promote transparency, which is really important, and accountability in public finance. Encourage investment of public revenue in education, healthcare, and social protection. Ensure women, girls, youth, and civil society have meaningful participation in policy discussion. Encourage financing that advance the Sustainable Development Goals, SDGs. And the question to raise, say, how can developing countries receive greater technical assistance? How can tax cooperation better support women and youth? What mechanisms ensure transparency and accountability? And how can us, civil society, contribute to this implementation? Together, we can build a world where fair international cooperation helps every nation invest in its people. Let us ensure that no country, no woman, no girls, no young person left behind. Thank you.

Thank you. Thank you again for the suggestions and the comments and the changes which have been proposed. We want to continue, and again, I want to congratulate us that we are doing well. Looking at my timer, most people are keeping within the 3-minute barrier, which is helping us. Repetitions are fewer, and so we We are making good progress. We now want to move to the next article, which is Article 7 on illicit financial flows, tax avoidance, and tax evasion. Again, we have worked together to put together the comments made by state parties. We want to ask again that does it provide the balance we want? Does it reflect what we've put together? Are there any additions, any subtractions that we want? I want to throw this open to everyone again so that we can get comments to continue to refine our document. So I'll open the floor for the contributions from member states and stakeholders. Okay, can we move to the next article? I'm asking, I don't see anybody. Ah, okay. Czechia.

Thank you, thank you, Mr.

Corley, for giving me the floor.

I'll try to break the ice. In general, Czechia understands the need to deal with the tax-related illicit financial flows. Therefore, we would like to give comments and suggest amendments to the text of Article 7 and the definition of tax-related illicit financial flows in Article 3. paragraph 2, to increase the clarity of the Framework Convention. Starting from the text of Article 7, Czechia would like to suggest deleting the words including tax avoidance and tax evasion, because the relationship of these 2 terms to the tax-related financial flows, illicit financial flows, is complicated, and this inclusion would make the provision confusing. In this line, we would suggest deleting the words tax avoidance and tax evasion from the title of Article 7. In the second sentence of Article 7, we would suggest deleting the word such in line with this change and with the fact that so far there is already a specific definition of tax-related illicit financial flows in Article 3. We also believe that the second sentence should be streamlined and that the reference to the jurisdiction whose tax base has been reduced should be deleted because it would introduce a unilateral and subjective tax test that could in practice lead to multiple taxation. Any such discussion should be reserved particularly only to protocols. We would also like to point out that a key part of the definition of tax-related illicit financial flows is that they are illicit, as mentioned in Article 3, Paragraph 2 of the draft. Thus, only financial flows that are unlawful can fulfill this definition, in our opinion.

Thank you very much.

Thank you. Zambia, please.

Sorry, good afternoon and thank you, Chair. Speaking on behalf of Zambia and also on behalf of the Africa Group, firstly, colleagues and Secretariat, we thank you for the text that you've drafted. It's obviously something that we can build on. Whilst we appreciate the text as Africa Group, we have some concerns in terms of some amendments to make. In place of shall cooperate, would rather we are more proactive and Insert the words, shall develop and implement measures to combat tax-related illicit financial flows, including tax avoidance and tax evasion. We believe the text as it is should be broken down into 2 paragraphs. We shall provide a written text, but suffice to say that in our view, we need to break it down. Exchange of information, and other agreed forms of international tax cooperation. That's our proposal of how the texts can be broken down into 2 paragraphs. We believe that it's very important that this article provides for measures that shall ensure the implementation by member states of having effective tools to detect and prevent illicit financial flows. As this is a very big issue, especially in most African countries, and obviously key measures in implementing the detection and prevention should be the enforcement of administrative mutual administrative measures. Obviously, the exchange of information and any other forms of international tax cooperation in trying to deal with this sketch and ensuring that revenues are collected. And therefore, the other part that is in the text. We split it into paragraph 2, and our proposal is that measures taken by parties under this article shall ensure that effective taxation of income and profits connected to tax-related illicit financial flows by and in accordance with the national laws of the jurisdiction where the tax base has been reduced thereby. It's very important that countries that are faced with illicit financial flows to maintain the right to collect the taxes that were eluded, whether illicitly or not. So at least this measure is very important. Coming to the definition, Chair, we looked at the definition and we are generally in agreement with the definition that has been provided. However, it is our view that the last parts of the definition probably should be deleted. And when I say the last part, when we look at the part that deals with non-tax crimes, I think the issue of giving the examples, the part that gives the examples, e.g., trafficking or smuggling, even if the crime would give rise to a revenue claim, I think that part, in our view, should be deleted such that the definition ends at tax crimes. It's not so clear in our minds why smuggling would be excluded from the definition, because smuggling in some instances does lead to loss of tax revenue, and therefore if it's illicit and it leads to a tax crime, And in our view, smuggling, most instances, has got tax implications, and therefore we don't see how smuggling should be out of scope. And therefore it is our view to avoid having ambiguity, we end the definition on tax crimes. We don't believe that we should still include, even if the crime would also give rise to a revenue claim. A revenue claim is very key in this instance of dealing with illicit financial flows, and therefore when there's an issue of a revenue claim, I think that tax should be collected. And therefore, in our view, that our— the definition, whilst it's okay, it just needs to be trimmed. We remove the latter part. I submit.

Thank you. Portugal, please.

Thank you, Mr. Khalid. First of all, I would like to support the proposal from the esteemed delegate from Switzerland that if it is possible to have an informal, informal regarding Article 5, I think it will be very fruitful. Going to Article 7, we want to welcome the reference to tax avoidance and tax evasion. Portugal referred that there was an inconsistency between the title and the article. In that matter, yes, we recognize that it has been an effort trying to achieve that balance, but we also said that tax avoidance is different from tax-related illicit financial flows. One is illegal, the other is legal. Of course, we must fight this— the aggressive tax avoidance, tax-related illicit financial flows, but they aren't the same thing, and that has consequences regarding procedures, the way to tackle So, and even if we remove the reference to including, in our view, that won't be sufficient because we have— before making proposals, and we like to make proposals, first we'd like some clarifications to understand.

Yes.

And we were looking at the definition article that we have to work with. And again, we thank you for this definition. We asked, and several asked for a definition. It is important to have clarity, to have certainty. It says tax-related illicit financial flow means a financial flow that is illicit in origin, transfer, or use. I went to see where— because here it doesn't say, and it doesn't have to say— where this came from. I found a very similar definition on a document, but it was made for statistical effect, the UNCTAD UNDOC 2020. And Looking at that document and the definition that is here, I had some questions that I would like some clarification, if possible, in order to make that informed proposal. That is to know, this tax-related illicit financial flow encompasses aggressive tax avoidance, And it also— when you talk about avoidance, we are covering lawful tax planning, but— and when you talk about aggressive tax avoidance, we are including activities that arise from legal economic conduct, or are you talking also about— For example, transfer pricing. That is important to know what the definition encompasses. I would like to have more clarity. Also, so that we have here where the principal purpose or one of the principal purpose of such flow is the avoidance or evasion. I looked at it immediately. At first, I I thought, oh, this is the principal purpose test, but no, because it's different, that test. So this must have another objective, even because one, it is to deny tax benefits, and this one is to combat illicit financial flows. So I would like some more clarification about this.

Thank you.

And lastly, there's an expression that it says that consists primarily of non-tax crimes. What is primarily when we talked about it? Because it has no associated measure— measurement criterion, so, and that is essential for determining which cooperation regime applies. So these are my questions, and I pose them in a spirit of— a constructive spirit and in order to give informed proposals. Thank you.

Okay, thank you, and your questions are noted. Generally, What I would say is that we are still working on the definition. It's indicative, as we've said earlier on. It's not a final thing. So whatever changes we want to do to it based on how we see, let's say, financial flows, I believe we can do that, then bring it up for discussions as we go along. It's not a casting wall. It's come from different definitions that we received or come across and trying to put it together, so we still have room to craft it a bit further. Thank you. Israel, please.

Yes, I will be short because I think that Portugal said most of what I wanted to say. We don't understand what is the illicit financial flow because As we saw in last meetings, different people see it in a different way, and I don't think that even though we have the definition, we don't understand exactly what it is. It still can be interpreted in different ways, so we will look forward to the change. And also, I just want to say that if we had an explanatory to the convention, it might have helped us understand some of the problems that there are here because we don't have any explanatory here. So it's like only the text itself is what we are— we can— we see in front of us and not an explanation why and how we got to each of the texts, so this will help, I think, in the end. But I'm waiting for— we're waiting for the change and the changes that you said, and maybe they'll make it clearer. Thank you.

Thank you. Just to say, what I said is that we are now crafting the definition amongst ourselves. There's no definition that we've picked and we are using. We are are crafting it. We are putting together how we understand what we believe illicit financial flows is. So that's how it's going to happen. So it's going to come from all of us putting together the words. It's not one place, not the co-lead or the Secretariat or someone saying this is a definition. No, we are putting the— as we gather, putting it together, then we'll come out with something which we'll all look at. So that's why I think the way we should look at it. Thank you. India, please.

Thank you, co-lead. Now, there are a couple of things over here, one related to the definition and the other related to the article itself. Now, I think it was helpful that the co-lead mentioned that we are in the process of drafting this definition and then the reflection of that That's the definition in Article 7. Now, the way we see it, there are 3 pieces to this. There is illicit financial flow and there is tax evasion and there is tax avoidance. We see this— we see a cause and effect relationship between these 3 elements, with tax-related illicit financial flow being the cause and tax avoidance and tax evasion being the effect. Towards that, we have a suggestion for the definition, and if you would indulge us, we would suggest that the definition could read, tax-related illicit financial flows means cross-border movements of funds or assets that are generated, transferred, or used through illegal or abusive practices for the purposes of tax evasion or tax avoidance. That is our suggestion, I mean, at this moment for the definition, and we would then suggest that the same thing be reflected in Article 7, because right now if you read the first lines of Article 7, it says the state parties shall cooperate to combat tax-related illicit financial flows, including tax avoidance and tax evasion. I'm not very sure whether including is the right word, if we are correct in seeing a cause and effect relationship between these various elements. So that is about the first line. That apart, we are with the definition— with the point made by the Africa Group that probably develop and implement is a better option than cooperate. That is, thereafter, the remaining part of that paragraph, and especially with the last lines that are added, which says, by and in accordance with the national laws of the jurisdictions, maybe we can have— we will give text suggestions formally, but maybe we can have language which will leave open that apart from national laws, there is also the possibility of us developing a protocol. And I don't know, maybe an STTR-style article style, which we see in some of the protocols that we are talking about. So maybe we can have language to that end also, so that we have all options available in this article going forward, so that if and when we develop a protocol on this, those options are also available for us.

Thank you. Germany, please.

Thank you, Mr. Co-Lead. Germany welcomes the inclusion of a definition of tax-related illicit financial flows that represents an improvement compared to the previous version of the text. In our view, the convention should clearly distinguish unlawful conduct from legitimate tax planning and lawful cross-border business activities. The term tax avoidance describes any action taken by a taxpayer to lessen tax liability and maximize after-tax income and is hence by itself completely legal. That being said, we do not fundamentally deny the possibility that an illicit financial flow or an illicit activity can constitute or serve the purpose of tax avoidance. The present wording of Article 7 continues, in our view, to contain binding implementation obligations whose practical implications are insufficiently defined. We too see a mismatch between the definition and the provision. Unlike the definition, the current provision, itself, it seems to imply that tax avoidance, tax evasion is per se an illicit financial flow. That is due to the mentioning of both next to tax-related illicit financial flows in the first line. Finally, we support the suggestions that were made by the distinguished delegate from the Czech Republic.

Thank you.

Thank you. Austria, please.

Thank you, Colette. First of all, Austria would like to echo what the distinguished delegate from Germany has just said. For the proposed definition of Article 3, we have been under the assumption that illicit financial flows pertain more to the nature of their origin rather than their potential outcome, and so we considered important to maintain conceptual clarity by distinguishing between IFFs, which are illegal in nature in our opinion, and tax evasion and avoidance. Furthermore, we think the current definition might cause confusion in the interplay with Article 7 and its context, and that has to be clarified. We would like to better understand where the draft definition that has been used in Article 3 comes from. And so in a way we echo what Israel has mentioned, that some explanatory notes where possible would be helpful for the discussions. For Article 7, we recognize that there has been positive progress made and we support retaining the language of cooperate in the first sentence. We furthermore suggest the deletion of the reference to exchange of information in the second sentence, as we are of the opinion that this term is already encompassed in the aforementioned mutual administrative assistance and does not need to be singled out. And furthermore, we suggest the deletion of tax avoidance and evasion in Article 7, as it otherwise creates confusion with Article 3. Thank you.

Thank you. United Kingdom, please.

Thank you, Mr. Kohlied. The UK would also like to echo what colleagues from Portugal, Germany, and Austria and others have said. The UK would like to note our concern with the definition of tax-related illicit financial flows. In the UK, Tax avoidance and evasion are legally distinct concepts. Tax evasion is criminal, whereas avoidance is not necessarily criminal, and grouping both concepts under the term illicit risks obscuring that distinction, and we would not be able to support such a definition of illicit financial flows. Thank you.

Thank you. Singapore, please.

Thank you, co-lead. We would just like to echo the sentiments of Portugal, Israel, Germany, and the UK. We remain concerned that the definition article on illicit financial flows and Article 7 treats tax avoidance and tax evasion as a single category. In our view, this misses the important legal distinction between the two. We had also tried to consider where The definition comes from— we, like Portugal, note that the UN Office on Drugs and Crime's conceptual framework for the statistical measurement of IFFs seemed to be similar to the definition articulated in the Convention in this regard, but we thought to point out that there is an important thing to note, that this is a framework developed for statistical measurement and not a definition for legal instruments. So I think there's still a bit of way for us to go. In fact, the framework itself, the UNODC framework itself, recognizes that there is no settled understanding of what constitutes an IFF, and there are a wide variety of approaches in literature and practice among countries. So we should therefore avoid importing a broad statistical concept into a legal convention in this way. So possibly one way could could be to delete the term including, but we would be happy to consider other alternatives as well.

Thank you. Thank you. Poland, please.

Thank you, Mr. Cowled. First, I would like to confirm that we support strengthening actions to address illicit financial flow. But while we see big progress in the proposal which was tabled and which is discussed today, especially the proposal for the definition, we still have some remarks on these 2 articles. Let me start with the definition. I think it's a good direction to have these 2 elements in the definition. First, that illicit tax-related illicit financial flows refers to the illegal flows. This is very important that this feature will give us this distinction between legal and illegal actions here. And the second issue is that definition proposes the second element, that this transfer should be done for the purpose of tax avoidance or tax evasion, which is good direction. Nevertheless, we should ask whether illegal action can be formally used for tax avoidance, which by definition should be legal structure and legal actions. So this is the question which we have to ask. Answer whether we should here in the definition refer to tax avoidance, which is generally not illegal. Nevertheless, I think that the direction which we— and the idea which we used here in the definition goes into the good direction. Coming to Moving to Article 7 itself, I would echo what our distinguished colleagues from Czech Republic, India, and Germany, I think Austria also, said that here in the first sentence, the Expression including tax avoidance and tax evasion do not fit into the definition, so we have to do something with this because generally tax-related illicit financial flows are defined with the reference to the purpose of tax avoidance and tax evasion, so generally we do not need this sentence as it is drafted now. It's not— doesn't work with the definition simply. So, but we have 2, in my opinion, 2 solutions. First one is just the deletion of this part of the first sentence and accordingly the tax avoidance and tax evasion in the title, as it was suggested by our colleague from Czech Republic. But if we want to tackle in Article 7 also kind of cooperation to combat tax avoidance and tax evasion, we should redraft this article and maybe to regulate this issue in the second paragraph or just to redraft what we have here because this drafting does not fit the definition as it is proposed now. Thank you very much.

Thank you. And this discussion is reminding me of something I learned some years ago which I found very interesting, and it has to do with the issue of conflict in sociology, where you mix everything up and out of the conflict you make sense of what you want. So there's nothing wrong with us being a bit— should I use the word not sure— unsure of what we really want. But as we continue tossing it over and around, I'm sure we'll come out with something that will be acceptable to all of us. So Azerbaijan, please.

Thank you very much, Mr. Khalid. Azerbaijan has 3 key proposals concerning this provision. First, clarifying the scope of tax-related financial flows, ensuring a balanced allocation of taxing rights, and strengthening international cooperation and capacity building. Related to first elements, we propose that provision clearly distinguish between tax evasion, abusive tax avoidance, and legitimate tax planning. Tax-related illicit financial flows should cover tax avoidance only where arrangements are artificial lack genuine economic substance, or contrary to purpose and object of applicable domestic legislation or international tax agreements. Legitimate tax planning conducted in accordance with applicable laws and tax treaties should not fall within the scope of this provision. Related to second element, provision should also recognize that taxing rights may belong— may belong to both source and resident country under domestic laws, tax treaties, and international rules. Giving the taxing rights only to country whose tax base for reduced may create disputes between the countries. And related to third element, cooperation under this article should be based on reciprocity, confidentiality, and data protection, due process, and exchange of relevant information. Developing countries should also receive technical assistance, access to analytical tools, beneficial ownership information, and support in identifying cross-border tax risk. Thank you very much.

Thank you. France, please.

Thank you very much, Khalid. We will begin by thanking you. It's extremely positive from our perspective that we have a definition. This represents real progress and we thank you. This is a prerequisite for our deliberations. Nevertheless, this definition raises a number of questions. What are we really aiming for here? It's not clear and I think this has been demonstrated by previous interventions that give the impression that it's not really clear to anyone and people don't really want to see the same thing. It has also been proposed prior to us. We support the idea of an explanatory note to explain what it is, what the problem is that we're trying to resolve here so that we can make progress. We believe that fleshing out this concept is not easy, but this will make it possible to find consensus and that will facilitate that process. So we would be grateful if you could take into consideration that proposal that was made by others and that we support. Thank you.

Thank you. Estonia, please.

Thank you. And thank you for explaining that we're, you know, this definition is still a work in progress. I would like to echo the comments of Czechia, Germany, Austria, UK, and also Azerbaijan. And I have a question regarding the term legitimate government revenue claim that we have in the definition of the tax-related illicit financial flows. Is this supposed to be wider than tax Or is it the synonym for tax? And I think it's quite important to distinguish between them because revenue claim as such is wider than a tax claim by the government. And if we want to widen the scope of the convention, I think that would also require a little bit of explanation. Thank you.

Okay, thank you, Estonia. And I'm trying to see, but I think a number of us were around when we were working on the terms of reference, and this issue of whether it should be, let's say, financial rules or tax Related illicit financial flows, I think, came up, and we settled on tax-related illicit financial flows. Now, as I mentioned, we are responsible for the definition. As we discuss it, I'm sure we'll be crafting it and finalizing it as we go along. Concerns are coming, thoughts are coming. We will all at the end of the day come out with a definition as to what we want. It's not going to come from me, it's going to come from all of us as we add and subtract weights, which is why I've avoided saying that this— but we are— what I have indicated again is indicative. is something we are all crafting. It's a definition we are working on. When we finish crafting what we want in 7, it will give us the definition. Actually, because at least I think that's what the lawyers normally say, that you define after the term is there. You look at the term and then define it. I'm not a lawyer, so that's why I'm a layman. So let's not be, um, saying that, okay, We want to— what's the word to use? That we want the source or whatever. We are the source. We are crafting an article, and out of the article we'll have the definition. Russian Federation, please.

Thank you very much, Mr. Co-Lead, for giving me the floor. On the whole, we support the inclusion of this article in the draft text of the Convention. We support the efforts undertaken by the States Parties in discussing this important article in this Convention, including we support the work of the African Group, which has proposed some improvements to the text of this article. This is why briefly I would like to touch on the fact that— on what in our view would improve the wording of this article. In that regard, we support the position— positions and the ideas which were expressed by the distinguished delegate of India about the fact that probably we need to differentiate among the reasons and the consequences of these actions, which are illicit financial flows.

Why?

Because in the first line, we have tax-related illicit financial flows, comma, including tax avoidance and tax evasion. This reading leaves some indeterminacy in one's understanding. Why? Because if you include tax avoidance and tax evasion, that means there's something else that falls under illicit financial flows. And there's a second aspect I wanted to point out. For a year, a year and a half, we've been living with the Name of this article, and it is Tax-Related Illicit Financial Flows, Tax Avoidance, and Tax Evasion. And so there might be a question about the name of this article. Should we leave it as it is, or should it undergo some changes depending on the determinations you and I arrive at? Thank you very much.

Thank you. Um, Mexico, please.

Thank you very much, esteemed colleagues, and thank you to, to other delegations here. I think that, uh, the previous speaker, distinguished delegate from, from Russia, kind of preempted what I was also gonna bring to the table. For us, you know, we understand that at some point there was a request to make sure that The title of the article matched the types of illicit financial flows related to tax that we were covering in the paragraph itself, but we also believe that we should perhaps just limit this to tax-related illicit financial flows. We understand that the discussion between tax avoidance and tax evasion, the legality and the criminality of it, is also something that we're very used to discussing here in the GA in Section 2. committee resolution on illicit financial flows, and even if it's not related to tax, the arguments stay the same. No, it depends on each country to define the legal obligation behind each of the actions and then criminalize one or the other. And if it's my understanding, this convention itself will play on the interoperability of the whole that we agree and ratify to what we will do with our domestic tax systems and regimes. So by consequence, including this provision here and listing it as a tax-related financial flow or a crime, let's say, then countries back home might consider criminalizing this activity. And that would also hurt individuals who do, or by default because of omission or avoidance, don't pay their taxes. And, you know, this could lead to something hurtful to that particular set of people. So we would also proposed to delete tax avoidance and tax evasion from this paragraph. I think that if we're going to relate this to a potential future protocol, as my esteemed colleague from India mentioned, and we said the same for high net worth individual, then it would be a good idea to maybe perhaps develop what we would like out of an IFF discussion here in the future. We already have somewhat of a definition, but that definition also includes that they should reflect an exchange of value and that crosses country borders. So perhaps in that sense we should also talk about trade misinvoicing and other commercial mechanisms that go around with tax mechanisms and by default take away a tax stream from revenue agencies. So we would be more in favor of a more general discussion here. And what we want out of this paragraph, what we want the COP to support member states to do, whether it's develop or enhance or implement measures, I think that in the same spirit as we did in a previous article, we would be— it's Article 6— we would also propose to say that shall cooperate to support the development, enhancement, and implementation of measures to combat tax-related financial flows. And perhaps this could also lead to the discussion on the definition. We need to be very careful. Sustainable development and illicit financial flows were the raison d'être of the convention as a whole in '22 and '23. It was mainly the plea to try to do something to tackle illicit financial flows, particularly in the African continent. And we also need to be very aware that if we start cataloging different types of activities under the tax-related crimes and some that are not really recognized as such, then we could trigger legal discussions of what countries should do to penalize their citizens. So we also need to be mindful of that because that would infringe on their taxpayer rights and that would infringe on some occasions on their human rights. So we would like to propose that and hopefully we can also have a conversation, maybe in an informal setting, of what it is we seek to achieve out of this article. Thank you.

Thank you. If my memory serves me right, I think somewhere along the line we did talk about trade, missing voices, and some aspects of customs as part of IFFs. I think that was a while back. But then it's still food for thought. Brazil, please.

So we've been dealing with this topic and trying different approaches, and basically the value is— we have 2 values here. One is to keep consistency with domestic legal systems that tend to have definition for illicit and criminal activities, illicit in the sense of criminal law. And a lot of countries are not at ease or not in an easy, in a comfortable position To change that definition. On the other hand, we have the different projects and different studies that were developed in different subgroups here in the— under the United Nations, and we want to keep the reference to illicit financial flow. So the question is how to reconcile those 2 opposing views. So, and what we have tried to do here is to have tax avoidance and tax evasion as subgroups of tax-related illicit financial flows. What occurred to me now is that we could do the opposite. We could, instead of making tax avoidance and tax evasion as subtypes, subspecies, is to change the order, and then we could mention tax avoidance, tax evasion, and tax-related illicit financial flows, so that we would clarify that the expression is still still there. We would satisfy one of the concerns here. And on the other hand, we would still allow countries to play— to use, to resort to their domestic definitions. There is a second question on the definition that we have proposed, that is in the document, actually, whether we should have an international definition of illicit financial flow or whether it should be— should work as a reference to the domestic law. I have the impression that we don't have to deal with it for the moment, as long as we don't make tax avoidance and tax evasion a subspecies. Of course, that— it would require some change in the wording of the paragraph, but basically we would simply revert that rationale in the text that tries to make tax avoidance and tax evasion subspecies. I have a proposal here. I think I can circulate instead of— I can also read, but basically we will remove the part on the first line that mentions tax-related illicit financial flows including, so that would not be the broad category. We would simply mention directly to combat combat tax avoidance, tax evasion, and tax-related illicit financial flows. So again, it would be a self-standing category. It would possibly satisfy both sides. And then it would continue in saying such cooperation shall include developing effective tools for their detection and prevention. We don't have to repeat the expressions. Then we would delete of such tax-related illicit financial flows. We would remove the expression. Continuing, to be enforced through mutual administrative assistance and exchange of information and any other agreed forms of international cooperation to ensure their effective income taxation. And then we will remove again the expression of income and profits from tax-related illicit financial flows.

Thank you.

By and in accordance with the national laws of the jurisdiction whose tax— whose tax base has been reduced, full stop. That could be another approach to try to make both sides happy. Thank you.

Thank you. Algeria, please.

Thank you, co-lead. First of all, we cannot repeat this enough. The African countries are the ones who are paying the cost of these illicit financial flows, and we are coming to around $100 billion per year. In terms of these IFFs. Really quite significant then in terms of their impact. As regards the wording here of Article 7, so we're moving from an obligation to act to an obligation to cooperate, which is certainly a weakening of the text in terms of the constraints importance, and cooperate is more flexible than draft, implement, elaborate. So we need to have some kind of obligation for concrete results, something that is binding here rather than just a commitment in terms of means. As regards the scope of tax evasion or avoidance, there are legal activities that structurally undermine the state's activity, and these need to be tackled just like IFFs. We welcome also the changes in this article in terms of enshrining this idea that it is the country whose tax base has been reduced that should receive the taxing rights. strengthening here in terms of the source is also useful. We welcome this. The definition seems to us could lead to confusion, might be problematic because it excludes— in the definition of IFFs, you exclude non-tax-related IFFs even if this leads to a tax debt. And I think this—

Thank you.

is going to reduce the scope of this article, whereas in fact the fight against these practices needs to be reinforced. Thank you, Chair.

Thank you. Nori, please.

Thank you, Mr. Colleague. We recognize the significant challenge that illicit financial flows pose for domestic resource mobilization and sustainable development for all countries, and we appreciate the intention behind including a definition in the Framework Convention. We strongly support international cooperation to combat tax avoidance and tax evasion and recognize the significant challenge these practices can pose for domestic resource mobilization. At the same time, we remain cautious about relying on the concept of tax-related illicit financial flows as the central legal concept in the convention. I think the interventions here have highlighted the differences in view of what this term encompasses, and it has been clarified that under many countries' domestic law, tax avoidance may or may not constitute illegal activity, that would be the same for us. So this brings us to the definition of the term as stipulated in paragraph 3. So we are concerned that the definition, while having good intention, could prove both under- and over-inclusive and overly restrictive. Certain activities that may be relevant from a tax cooperation perspective could fall outside the definition, while other situations could be captured in ways that create unintended consequences. For example, from a technical perspective, several elements of the definition appear difficult to interpret and apply consistently among jurisdictions. Concepts such as legitimate government revenue claim, principle purpose and the distinction between tax-related and non-tax-related illicit financial flows may give rise to uncertainty and differing interpretation across jurisdictions. And this could make it very challenging to effectively operationalize this commitment. I think all the interventions we've heard has highlighted this. So for these reasons, we question whether such a definition is necessary for the implementation of the convention. Rather, we should focus this commitment on cooperation to prevent and combat tax avoidance and tax evasion. Those are the things that the definition are attaching to, you know, where the principal purpose is the tax avoidance or tax evasion. So throughout our discussions, member states have broadly expressed agreement that such cooperation is valid and necessary. We will provide more detailed comments in writing, but this means in our view that going forward we should focus primarily on the cooperation related to practical tools that enable countries to address the underlying drivers of tax-related illicit financial flows, such as effective exchange of information, mutual administrative assistance, transparency, and other forms of international cooperation that are among the most important mechanisms available to combat tax avoidance and tax evasion. If it's considered necessary to retain the reference to tax-related financial flows, we would refer to our proposal from the previous session. Our suggested edits would provide greater flexibility regarding how state parties choose to cooperate and would better reflect the different legal systems, capacities, and circumstances of state parties. We believe that this approach preserves the ambition of the Article while ensuring the cooperation can evolve over time and focus to measures that prove effective in practice. Thank you.

Thank you. There's one thing I like about tax. We can decide to be very specific when we want to. But we also don't like being specific when we are not sure of what we want to say, and I see that reflecting this afternoon, but it's good. Let's continue. Denmark, please.

The floor, Mr. Co-Lead. We also recognize the challenges that IFFs pose for countries in their domestic resource mobilization, and we welcome the discussions on this article and also the discussions that have been on how we define illicit financial flows. We do share the sentiment firstly expressed by our colleagues from Portugal and by other European colleagues, and also by the UK and Singapore. In this regard, we also find it rather interesting, the Brazilian proposal that has just been vocalized here, and we look forward to seeing it in writing and maybe having a further discussion on that as a potential way forward. But thank you for giving me the floor for now.

Thank you. Honduras, please.

Thanks for the floor again, Mr. Co-Lead. Honduras would like to echo the concerns raised by Mexico and other delegations. Concepts such as tax avoidance and tax evasion already have an established legal legal meaning in many domestic legal systems, often complemented by judicial interpretation and administrative practice. As a result, these concepts are not necessarily understood or applied in the same manner across jurisdictions. For this reason, we believe that when refining the definition of tax-related illicit financial flows, care should be taken to avoid inadvertently creating new substantive definitions of tax avoidance or tax evasion that could conflict with domestic legal frameworks or generate divergent interpretations among state parties. In our view, the convention should focus on defining tax-related illicit financial flows while allowing existing domestic legal concepts of tax avoidance and tax evasion to continue operating within their respective legal systems. This approach would strengthen legal certainty, facilitate implementation by state parties, and promote greater consistency in the application of the convention. Thank you, Mr. Khalid.

Thank you. Senegal, please.

Merci.

Thank you very much, Colleague. I will begin by supporting the remarks made by Zambia on behalf of the African Group and also the words by Algeria, especially as regards the need to move from an obligation to cooperate to an obligation to act and to implement. But also there is a need to structure Article 7 and to break it down into 2 paragraphs make it more coherent and clearer. As regards the deletion of tax evasion, tax fraud, or tax avoidance in the provisions of Article 7, I think that we should have a very cautious approach here.

Why?

Because there is a very strong correlation between illicit financial flows, tax avoidance, and tax evasion. If you take the case of tax avoidance or tax fraud, which is a deliberate act to avoid paying tax in a given jurisdiction, and here we are dealing with a failure to act in relation to a legal provision. The IF describing IFFs as illicit would essentially amount to the same thing. So, and so what this means is we removing tax fraud and the other terms causes a problem when you're talking about. Prices that are not competitive because you are trying to move your profits into a more privileged tax jurisdiction, the basis of the transfer is this manipulation which represents fraud. And so this falls under illicit financial flows and so the scope. The fact that this revenue has been domiciled in a more beneficial place represents tax evasion. And so it does have a source, and that is tax fraud. So the 2 things are very closely linked in certain circumstances. In other cases, there is no link. If indeed tax evasion is only motivated by having exploited the gaps in existing legislation, that is tax fraud. evasion and there is no link to illicit financial flows. So I think we need to analyze this on a case-by-case basis and see what factors are closer together before we really consider a deletion of any of these terms. Thank you.

Thank you. Belgium, please.

Thank you, Colleague. First of all, Belgium strongly supports international cooperation against illicit financial flows, and we want to thank you on the work done done on Article 7, but we would like to align with the drafting suggestions made at the beginning of the discussion by the distinguished delegate of the Czech Republic, and we would like to align ourselves with what Germany, Austria, UK, Poland, Singapore, and Estonia set before us. Also, we are wondering what is the real goal here of the Article, and we align ourselves with the clarification asked by France and Mexico on the possibility of clarifying what are we really aiming to achieve here, because it is confusing. The distinguished delegate of Russia also mentioned it. We have Article 7 that says there's tax-related illicit financial flows, tax avoidance, and tax evasion in the title. We had a discussion in Nairobi where I remember you said, Daniel, those are 3 different concepts. With each definition, but then now we see in the article that it's tax-related illicit financial flows including tax avoidance and tax evasion, so that's not— then you don't make it 3 different concepts because you say one is part of the other. And so it is confusing, and we are also unclear about how this relates to the existing UN General Assembly resolutions on illicit financial flows, because those resolutions, when they mention tax-related matters, it's only mentioning tax evasion without referring to tax avoidance. So there should be coherence because it's still an illicit financial flow. And when tax is mentioned also in the specific resolution about IFFs, I'm referring to Resolution 73/222, where there is also a reference to the illicit financial flows caused by tax evasion only. So that also makes it clear again that there is a legal distinction still between tax evasion and tax avoidance, a different definition, and we cannot put those on the same line. So that is mainly our concern. So, and we would also be in favor of what the distinguished delegate of Mexico said to maybe make this also a subject during an informal informal to what we really want to achieve here because the aim seems a bit unclear. Thank you.

Okay, thank you, Berjam, and since you pointed me to something I said earlier, I think let me go back to Now, when we pick the terms of reference, I think it is 10E, talks about addressing tax-related illicit financial flows, tax avoidance, tax evasion, and harmful tax practices. To make it a bit more— to break it down a bit, we split that into 2. Okay. Now, discussions we are having currently, I think I talked about the issue of things getting mixed up. It's actually to help all of us come to one agreement on what we want to do and what we want. So as we contribute, as we add, as as we subtract, I believe we'll all get to where we want to be. It's— the message is coming out of what we want to do and how we want to get there, and basically that's what we reckon on. So let's not be too worried about not being too sure. As we discuss, we'll get there. Jamaica, please.

Thank you very much, Chair, and I do think that we want to get But, um, and Chair, you have, you have asked, um, you have indicated that, you know, as a body we have to come up with a definition. And I think that that is a sentiment in the room. I do think that we want to come up with a definition.

I'm not going to comment on Article 7 because I, um, we can't comment on Article 7 until we understand what we're talking about, which is what the definition proposes to do.

And I'm wondering, Chair, whether or not anyone in the room—

because this is a collaborative effort— if somebody could provide an example of what it is that we are talking about.

I have read this definition several times, and the only thing I can align myself with is confusion, right? So, for example, Chair, If, if something is illicit in origin, right, I'm not so sure then as to why what we are referring to as non-tax crimes, trafficking or smuggling, are exempt from, from, from, from illicit financial flows. And it goes on to say even if the crime would also give rise to a revenue claim, which seems to fetter the, the hands of the tax authority. if there is a flow from trafficking or smuggling. And so, Chair, I think, um, you know, at minutes to 5, if somebody could just give us an example of what, what it is that we— that is intended to be targeted, then I think then, um, we, we—

it could, you know, um, go away in, in helping us to arrive at the, um at the conclusion of—

yeah, that's my intervention.

Okay, thank you, Jamaica. I'm sure I'll come out with my statement soon. Switzerland, please.

Thank you, Mr. Khalid. I guess there's some disadvantages of talking towards the end, is probably a little less heard. than talking at the beginning. The advantages are you can echo lots of people. I have nothing new to bring. I think in particular Belgian's intervention basically recapped everything I have to say, so out of efficiency, I'm not going to repeat everything. I think the main point here is to remember illicit financial flows has the word illicit in it, so we have to make sure as we're thinking about these notions that we are clear to distinguish what is illicit and what is not, encompass activities that are not illicit. And I would also, I mean, echo everybody who Belgian echoed, but in particular the Czech proposal in the simplification of the language. And maybe that's part of going back to the terms of reference and the language of Article 16, letter B, where we just talk about tax-related illicit financial flows and nothing more than that. Thank you, Mr. Khalid.

All right, thank you. Nigeria, please.

Yeah, thanks, Khalid, and I want to say that this article is of importance to developing countries, especially to Africa, because of the quantum of resources that have left our jurisdictions. The statistics are so damning and, you know, we can therefore not but support this article. including the effort to address the tax-related illicit financial flow. I know that the African team had spoken, and so we support the position that had been confessed by the African team. We want that, and just to remind us that Part of what was presented by the African team was that this is too long, we better break it into 2, and also make it much more commitment— committed, obligatory. So we support all of those. In addition, I want to speak to the issue of a vision and avoidance, which I think are part of the issues that are becoming burning since we started this discussion this afternoon. And I take it from what you said, Colette, reference to the terms of reference, it is there that we have a commitment to address tax-related illicit financial flow, tax avoidance, tax evasion, and harmful tax practices. That is part of the terms of reference that this committee is working on. Another dimension to look at it is the word illicit, and if my gauge of what I heard, or I've been— colleagues I've been speaking to is correct, it appears we are taking illicit to mean illegal, but a quick check at my dictionary shows that it only mostly means illegal. It doesn't mean totally illegal. And what that says is that breaking social rules, doing things that seems morally wrong, even if no law is broken is also illicit. So illicit goes beyond illegality. And when you now look at avoidance, avoidance may not be illegal but are also offensive, especially to taxation, to effective taxation. And that explains why even in other forums, issues of efficient have been addressed. For example, the BEPS works that were developed—

Avoidance.

Attack avoidance. Most especially, if you look at interest deductibility rule, there is nothing that is efficient in interest deductibility. The intention was, oh, this is an avoidance scheme that needed to be addressed. And I want to say that if not all, majority of colleagues in the room, their jurisdictions have introduced interest deductibility rule and such other rules that targeted efficient affordance, sorry. So that is important for us to bear in mind. Lastly, I think the African team also spoke concerning the definition, and it is the last sentence here that I really want to also emphasize. When we are saying that non-tax crime should be spared. For me, if a smuggler or a trafficker has earned an income, that income affects taxation, and he has not paid tax on it, he has committed 2 offenses: one, trafficking, is an offence. The income made from trafficking or smuggling that he didn't— he or she did not pay tax on is also another offence. So it has become a tax-related offence. Why then should we spare it, and why do we want to spare it going by that definition? I think the right thing to do is to take that off. I yield back the floor. Thank you.

Thank you. UAE, please.

Thank you, Khalid. The UAE recalls that the terms of reference included a commitment addressing tax-related illicit financial flows, tax avoidance, tax evasion, and harmful tax practices. We note that harmful tax practices have now been addressed under a separate article. In this context, we believe that there may be merit in considering a similar approach for tax avoidance and tax evasion. Establishing a dedicated article that contains a high-level commitment addressing illegal or aggressive forms of tax avoidance and tax evasion could help alleviate some of the concerns that have been raised by a number of delegations during our discussion. In addition, the UAE shares the views expressed by others that the definition and scope of tax-related illicit financial flows would benefit from further clarification. Greater precision in this regard would help promote a common understanding among member states and support more effective implementation of the instrument. Thank you.

Thank you. Kenya, please.

Thank you, co-lead. We align with the position submitted by Zambia on behalf of the Africa Group. We continue to support the replacement of words like cooperate with more actionable terms like develop and implement measures as proposed by the Africa Group to ensure the implementation of this commitment. We also fully support and appreciate the adoption of the last part of this paragraph that makes reference to ensuring effective taxation of such flows by the jurisdiction whose tax base was reduced as a result of the IFF, and my colleague from Algeria very well address the concerns that the African continent faces with illicit financial flows, and we need to support the taxing rights of these jurisdictions. On the definition, we support the deletion of the second sentence that has proposed exclusions which in our mind are within the scope of the proposed first part of the deletion, and my colleague from Nigeria has also expounded on that. So I won't repeat that so much. We are also concerned with the qualification of the term purpose by referring to principal or one of the principal purposes of such flows, because this creates a lot of subjectivity, and those in the tax space, maybe especially for developing countries, are familiar with the challenges that we face when it comes to implementing the principal purpose test and the burden of proof that goes along with that and the subjectivity that also goes along with it. So we don't think that that is something that should be carried forward into the definition of illicit financial flows. We're, however, still considering a proposed draft of the definition, and we're also open to considering and discussing— sorry— the proposals of other countries.

Thank you.

Thank you. Ireland, please.

Um, thank you, Mr. Co-Lead, for giving me the floor, and thanks to you and the Secretariat for the updated article. We fully support work in this area of IFFs. To avoid repeating, I will just echo Czechia, Belgium, UK, and others that they referenced as well. Like many others, we do not support a definition of tax-related illicit financial flow that includes tax avoidance. We look forward to examining the distinguished delegate for Brazil's proposal when we see a copy and appreciate their efforts to find a solution. I would also echo the requests for examples that the distinguished delegate for Jamaica just made. Perhaps these examples, if there are some, could form part of the explanatory note that France, Austria, and Israel called for, and we think that might be helpful in finding a way way forward. Thank you.

Thank you. Japan, please.

Thank you, Colleague. We understand the importance of this article and we welcome that the current draft aims to strengthen international cooperation. That said, I would like to echo many other member states who pointed out that definition of tax-related illicit financial flow, in particular the relationship with tax avoidance and tax evasion, is unclear. Furthermore, questions remain regarding consistency with the fact that tax avoidance is not illegal. I also wanted— we also wanted to echo what has been said by Jamaica. We also support the proposed amendment to the title of Article 7 to remove the reference to tax avoidance and tax evasion. Thank you.

Thank you. Mexico, please.

Thank you very much, Co-Lead, and apologies for taking the floor again. Just hearing all the comments and because you mentioned that we used to have harmful tax practices together in a cluster with these other concepts and seeing the structure for Article 8, it comes to mind that perhaps As you mentioned, the chaos that is eluding us in Article 7 could be fixed by structuring it like in Article 8. If I can be indulged, for us, I think that if we just divided the paragraph, and the first paragraph would be from state parties shall cooperate to until such tax-related financial flows, and then we would go to another paragraph that says state parties shall cooperate through mutual administrative assistance and exchange of information all the way to the end. And then a 3rd paragraph will mirror paragraph 2 of Article 8: Parties shall explore appropriate measures and tools to address tax-related illicit financial flows, including those related to— and then we do a listing. And that is where we come and avoid the definition of illicit financial flow but have a discussion on what activities fall under a tax-related illicit financial flow. And so we list tax evasion, tax fraud, misinvoicing, smuggling and trafficking, whatever it is that we want to tackle in this. And this would also help with the future development of a protocol in which we could isolate the exact activities that we're looking for and maybe give some direction on what we want out of the mandate to tackle and combat IFFs that come from the terms of reference. So if this is something that we can also kind of propose to the room and structure it in that manner, maybe if we are ever indulged with an informal informal or a drafting exercise, we can also look at this and talk to other colleagues and see how we can either strengthen or ensure coherence in this article. Thank you.

Right. United Republic of Tanzania, please.

Thank you, Khalid. Uh, the United Republic of Tanzania aligns itself with the statement delivered by Zambia on behalf of the Africa Group, um, and many other delegates who fully or partly support Africa Group's proposal. We support redrafting Article 7 so that it clearly reflects in the mandate in paragraph 10 of Annex 1 of Resolution 789/333, particularly the commitment to address tax-related illicit financial flows. In our view, the word cooperate is too weak. Stronger language such as develop and implement effective measures would better reflect the level of commitment expected under the terms of reference. Tanzania is also concerned with the proposed removal Of references to tax avoidance and tax evasion. Tax-related illicit financial flows often arise through aggressive avoidance, evasion, profit shifting, false invoicing, and concealment of income. We therefore support retaining all 3 elements: tax avoidance, tax evasion, and tax-related illicit financial flows. We also support paragraph 2 proposed by Zambia on behalf of the African Group. It is important that income connected to illicit financial flows is adequately taxed in the country where the economic activity or crime is originated or connected, or where tax base is eroded. I thank you.

Thank you, Tanzania. China.

Thank you, Kali, for giving me this floor. We support combating tax-related illicit financial flows. In addition to the ambiguous relationship between the tax-related illicit financial flows and tax avoidance and tax evasion already addressed by my colleagues. The current wording of Article 7 also does not clearly present the link between the effective tools and the mutual administrative assistance and exchange of information. Additionally, we recommend further improving the implementability of this article. Thank you.

Thank you. Philippines, please.

Competing tax-related illicit financial flows under Article 7 is a central objective for the Philippines. Cross-border profit shifting and tax evasion undermine national revenue bases, and international tax cooperation can provide the needed security against these. Currently worded, however, there seems to be a confusion created with the use of the terms tax-related illicit financial flows, tax evasion, and tax avoidance, as well as the true subject of the action being asked of all the parties under this article. The article could be further improved if we are clearer on the objectives that we want to have. Under the TOR, we are also tasked to develop a protocol on measures against tax-related illicit financial flows. So that should necessarily stem from this provision. So it is very important that we should be more intentional on what we want to do under this provision. Thank you very much.

Thank you. Republic of Korea, please.

Thank you, Co-Lead, for giving me the floor. Regarding Article 7, first of all, we would like to thank the Secretariat for preparing the revised draft. We appreciate the revision from develop and implement measures to cooperate, as it appropriately focuses on cooperation rather than creating direct implementation obligations. In terms of definition of tax-related illicit financial flows, we align with the comments made by previous speakers, including Belgium, Germany, Singapore, and Australia, and others. And we welcome the draft provided by Singapore and Brazil, and we think it could be a good start for the discussion. And we also support the idea that explanatory statement would be helpful.

Thank you very much.

Okay, thank you. Italy, please.

To support intervention made by some European countries and also the United Kingdom and others in saying that the reference here to the definition of tax-related illicit financial flow, it's vague. And generic, and this is problematic from our perspective also because in our understanding there are some aspects like tax avoidance which are clearly not included. So our— I mean, this is problematic because the reading of the article, this is in particular Article 7, would entail the definition of illegal, of illicit financial flow led to the jurisdiction whose tax base is reduced, and it is something that clearly does not help to have a common understanding and to have a, say, a cooperative exercise. So our strong recommendation would be to try and define better, as many delegates have indicated, the what we are trying to achieve here through examples to an explanatory note, which is clearly essential to have a common understanding on what we intend to achieve and also on the definition, which is at this stage very, very generic and vague. Thank you.

Thank you. The Kingdom of the Netherlands, please.

Thank you, colleagues. The Netherlands attaches great importance to tackle worldwide tax avoidance and combat tax evasion and illicit financial flows. In order to effectively address these issues, it is of utmost importance that there is clarity on the meaning of the terms used here. And I will not repeat what many colleagues have said in the room to illustrate that there is no clarity and need for clarity on these issues. We therefore support informals informals on this article and Article 5 likewise, and develop a common understanding and explanatory notes as to what we are trying to achieve with this article. Thank you so much.

Thank you. Okay, I think we can move to stakeholders now. I don't see any other member state requesting for the floor. The African Union, please.

Thank you, co-lead, for your guidance through this process and for presenting this revised text on Article 7 for our consideration. We align ourselves with the statement delivered earlier by Zambia on behalf of the Africa Group. We also align with the statements and interventions made by Algeria, Senegal, Nigeria, the United Republic of Tanzania, India, and Russia, amongst others. We wish to offer our support to these statements. We agree with the Africa Group that the word shall cooperate waters down the context of this specific article and that it should be replaced with shall develop and incorporate and implement. On the second paragraph, as proposed by the Africa Group, that we split this, we agree that there should be mention of the jurisdiction whose tax base has been reduced thereby as a result of IFFs. For a long time, the African continent has has worked to provide some guidance on the definition of illicit financial flows. And as most of you may know, there was a panel that was constituted by the African Union members of state, heads of government, to particularly look at a definition for illicit financial flows. So in this regard, to offer some motivation and some inspiration and probably to unconfuse delegates. The definition that was provided for by the High-Level Panel on Illicit Financial Flows from Africa was that illicit financial flows encompasses money that is illegally earned, transferred, or used. I submit.

Thank you. DM UN Foundation.

Thank you, Chair. I'm delivering this intervention on behalf of the Financing Thank you. I'm speaking on behalf of the Committee for Development, Children and Youth constituency of the Major Group of Children and Youth on Article 7. We welcome the commitment of States Parties to cooperate in combating tax-related illicit financial flows, tax avoidance, and tax evasion. Effective implementation of this article will require clear legal definitions, reliable detection tools, timely administrative cooperation, and appropriate safeguards for taxpayers. Information. We encourage further clarification of the relationship among tax-related illicit financial flows, tax avoidance, and tax evasion. In particular, the convention should distinguish illegal tax evasion from abusive avoidance arrangements that may formally comply with certain legal provisions but undermine their purpose. Greater precision would support consistent enforcement across jurisdictions and and reduce uncertainty for both governments and taxpayers. Detection and prevention tools could include beneficial ownership information, country-by-country reporting where applicable, risk-based auditing, transaction matching systems, secure data analytics, and mechanisms for identifying arrangements involving shell entities, false invoicing, concealed assets, or artificial profit shifting. Their use should remain consistent with domestic law and include protections for privacy, confidentiality, cybersecurity, due process, and the proportional use of information. Mutual administration— administrative assistance and exchange of information should be timely, secure, and based on clear procedures. The convention should clarify the responsibilities of requesting and requested states applicable eventuary standards, permitted uses of exchange information, data retention requirements, and remedies for unauthorized disclosure or misuse. We encourage technical guidance for identifying the jurisdiction whose tax base has been reduced. Complex arrangements may affect more than one jurisdiction, creating competing revenue claims. Transparent nexus and allocation criteria, coordinated assessment and effective dispute prevention mechanisms will therefore be necessary to ensure that income and profits are taxed appropriately without producing double taxation. Implementation should account for differences in administrative capacity. Countries may require support to establish beneficial ownership registries, strengthen audit capacity, obtain relevant cross-border information, build secure digital systems, and and analyze complex corporate and financial structures. Tax-related illicit financial flows can reduce the public resources available for education, healthcare, social protection, digital infrastructure, youth employment, and climate resilience. Combating these flows is therefore essential to domestic resource mobilization and intergenerational equity. The Major Group of Children and Youth supports an approach that combines effective enforcement with legal certainty, procedural fairness, data protection, and equitable access to international cooperation. We thank you.

Thank you. Latin Dad, please.

Señor Presidente.

Chair, co-lead, I'm speaking on behalf of the Latin American Caribbean Trust Tax Justice Network, Latin Dad. It seems that we have slipped backwards. We have regressed. And I need to therefore reiterate a number of key ideas and highlight a number of key omissions in this crucial text, namely Article 7. As we said at the 4th session, the first proposal of civil society was honesty. As you know, the exchange of information as currently exists under the standards are presented as a global solution, but the reality is that this continues to be an exclusionary mechanism. As stated by the High-Level Panel on Illicit Financial Flows in Africa, we believe that transparency is essential for all efforts aimed at halting illicit financial flows, given that the main objective of the perpetrators of this is to further enrich themselves. So why are we not looking at data security standards and technical capacity and how they continue to be used to block the exchange of information and public access to real ownership and sharing information with the Global South? We're not here to review work done in other fora. We are here because other fora have not been able to achieve corporal on fully inclusive and effective tax cooperation as established in Article 1 of the text that we are negotiating. And so civil society proposes that this framework make progress on 2 key areas. Firstly, reestablishing the zero draft of Article 7 and the obligations in relation to development and measures to combat illicit financial flows because cooperation on its own, as it currently says, does not achieve that objective. Secondly, there should be a global register of assets that is publicly accessible. We know that there are broad networks of offshore tax havens and this is so big that no single country can deal with this on their own. Tax evasion is the enemy of tax justice. Illicit financial flows are a hemorrhage for development. There cannot be climate justice, gender equality, or social peace if we continue to allow these kinds of resources to be drained. It has been more than a decade that we have been working on these standards. Why do some countries insist that we replicate a model that has already proven itself to be ineffective for the majority of the planet. We are not here to request help. We are here to demand real changes. We are not going to accept a weakened text that maintains the status quo and excludes civil society. Thank you for your attention.

Thank you. TGN, please.

I speak on behalf of the Tax Justice Network and the wider civil society group coordinated by the Global Alliance for Tax Justice. Illicit financial flows are a grave challenge, and the evidence consistently shows us that cross-border tax abuse, both tax avoidance and tax evasion, is the single largest component. International tax cooperation is therefore crucial to fight the damage that illicit flows cause to public finances and to governance in countries at all levels of income. Now, unlike many terms in the draft convention text, illicit financial flows has a full, and I should add very clear, definition that has been agreed by all member states in the United Nations formal statistical definition, the Conceptual Framework for the Statistical Measurement of Illicit Financial Flows. Now, this of course includes both cross-border tax avoidance and tax evasion. Flows can therefore be mitigated, at least partially, by international tax cooperation, and the Convention can and should provide powerful tools to fight all illicit financial flows. So we are concerned about the narrowing of Article 7 in conjunction with the proposed definition in Article 3, as has been highlighted already very powerfully by Jamaica, Nigeria, and Kenya. Narrowing the focus to tax-related illicit financial flows takes an approach that perhaps inadvertently is in opposition to the Convention principles of effective and inclusive cooperation. The current text explicitly excludes those illicit flows that give rise to a revenue claim but may be driven primarily by non-tax motives. Now, this would create a needless impediment to the effectiveness of cooperation. So imagine, if you will, that Senegal was to share information with France about the taxable assets of a former French politician. Would it make sense to prevent French authorities from using that information to investigate potential corruption? Or imagine that Mauritius was to notify the United Kingdom of transactions by one of its multinational companies that evidence trade misinvoicing and bribery. Would the UK turn a blind eye and be content to investigate the tax implications only? Surely not. So the convention should ensure that international tax cooperation can tackle all illicit financial flows effectively. We therefore propose that Article 7 be titled Illicit financial flows, including cross-border tax avoidance and evasion. We further propose that the artificial limitation to tax-related flows should be removed throughout the text. And finally, Article 3 can then simply use the full agreed United Nations definition. Thank you.

All right, thank you. ETAF, please.

Thank you, Chair, for giving us the floor. Chair, we want to align ourselves with the view expressed by the African group through the Zambian delegation. We also want to fully associate with comments supplied by Nigeria, Senegal, and other African countries, plus the comment just made by Tijen. There are 3 main reasons why we are supporting the proposal from the African Group. One, the terms of reference is very clear that we will have to handle issues relating to tax avoidance, tax evasion, and illicit financial flows. Whether or not we want to handle it in one article, the bottom line remains that we have to handle them. And given the fact that the consequences of all these 3 elements are almost the same to the extent that they facilitate flow from one jurisdiction to other and they deplete resources available for development in given jurisdictions. They should be treated in one article, as have been proposed by the African Group. The second point here is that the proposal converts an understanding to corporate which was in this previously suggested text to a more— to an obligation which could be operationalized by tax administration. We support that language which constitutes obligation as to the one which is just suggestions or guidance. The 3rd element is that paragraph 2 secures the remedy where it belongs. The jurisdiction whose tax base base was reduced should be the rightful jurisdiction to tax illicit flows, tax avoidance, and tax evasion. They drain our tax bases, especially in the African continent. The corrective taxing right therefore must return where it belongs. We also unequivocally support the provision— the proposed definition of tax-related illicit financial flows, including its coverage of tax avoidance. To delegations who object that avoidance is not illegal, we say respectfully that the term AG have proposed chose its language carefully, and the language it chose is illicit, not illegal, and the distinction is deliberate. Illegality is a conclusion of criminal law. Illicitness is a broader standard, embracing conduct that, while lawful in form, may be improper or defeat the object and the purpose of the law and strip a jurisdiction of a legitimate revenue claim. That is precisely what aggressive tax avoidance does, and it is why many reputable international organizations, including the one just cited by Tijen, the UN Statistical Framework or commission include tax avoidance within the conceptualization of illicit financial flows. Had only criminal conduct been intended, the convention or the proposed language will speak of illegal flows. We are not talking about illegal flows. Legality of form does not cure illegitimacy of outcome, and we are saying our members do not cherish the outcome of aggressive tax planning, and we should take measures to curb that. For the same reason, we also support the proposal made by the African Group that the last leg of the definition of illicit financial flows, starting from the example, be deleted. We believe that doing that will bring about more clarity and purpose to that definition. We thank you, Chair.

Thank you. CFS, please.

Thank you, Koolid. Now, the heading under Article 7 reads as tax-related illicit financial flows, tax avoidance, and tax evasion, and it seems to suggest that 3 different subject matters are going to be discussed. Now, it is also understandable why tax avoidance poses problems being placed besides IFFs. But there is also no agreed definition on IFFs where some of the indicators that make up the understanding of IFFs can be clarified. So Article 7 could actually chart the way forward. But first, to resolve the avoidance place— avoidance placement challenge, the first operative sentence that reads, the state party shall cooperate to combat tax-related illicit financial flows. It would be better to delete including tax avoidance and evasion and instead to simply say, to combat tax-related illicit financial flows. Pardon, I think I've missed my sentence here. Yeah. So the first operative sentence could be amended to read that state parties shall cooperate to combat tax-related illicit financial flows, to delete what follows, and to replace it with, and to combat tax avoidance and tax evasion. So the word there is to combat as well, so that there is no this definitional tension or disparity. The duty will remain unchanged, the coverage will remain unchanged, and the conceptual objection that has been raised will disappear because nothing lawful is any longer being described as illicit. That is one suggestion, but a deeper look into the definition under Article 3 is needed to reform the tension— to remove, rather, the tension that also arises due to the provision on leaving out non-tax crimes that give rise to a revenue claim. Then the second operative sentence that says such cooperation shall include developing effective tools for the detection and prevention, it would be appropriate to add after prevention and recovery of such tax-related illicit financial flows, because prevention is not simply adequate. We also have to be able to recover some of the proceeds lost because of tax-related illicit financial flows. Thank you.

Thank you. BCAS, please.

Thank you, co-lead. The definition is probably the most difficult thing in the entire convention, draft convention, to understand, and the frustration expressed by several speakers is obvious and justifiable. We do not know what we want to do, what we are supposed to do, and that's like attempting to act in a movie without proper script, story, or dialogues. The definition of illicit financial flow may have settled, as said by the previous speaker, but the problem is that we have to relate it to taxes because the word used here is tax-related IFF. One approach could be to simply dilute the word or ignore the word tax-related and accept the wider definition which is settled elsewhere. And this is going to work for the reason that any person who indulges in illegal activities is not likely to offer that income to tax. So, so the definition will be satisfied. Now coming to the current definition, it's using a very interesting term, legitimate government revenue claims. Now can we think of a situation where the revenue claim by the government is illegitimate? If yes, then who decides it? Does it work like Article 23 dealing with tax credit? when the country of residence says that, well, this taxation is not in accordance with the tax treaty, and that's why we'll not give you tax credit. So if one country takes a view that it's, it's not a legitimate government revenue claim, and then we will not cooperate under Article 7. Assuming that the objective is to target non-tax crimes, a simple definition could be any financial flows Including exchange of goods and services caused with the objective of evading taxes. Alternatively, any financial flow including exchange of goods and services on which due taxes are not paid. I am adding the word including exchange of goods and services because financial flow is simply flow of money. You know, that money could have been converted into, you know, into an asset within the country and then it gets transferred. Last point, tax avoidance and tax evasion should ideally not be placed in the same basket. Thank you.

Thank you. IBDT, please.

Howdy, and it's actually William Barnes from Texas A&M, and I thank my colleagues from IBT allowing me to sit in for them. My colleague, uh, Pramod Kumar and I have previously submitted comment letters with specific language suggestions. Today we have such a recommendation, a pedantic one for sure, to replace one word with another that will clarify the meaning of Article 7's 5th sentence clause, which reads, to ensure the effective taxation of income and profits from tax-related illicit financial flows.

The word—

the use of the word from in this context of this clause may reasonably be read that the article's focus is to tax the income derived from the intermediaries, such as financial institutions, that enable illicit financial flows. We do not think such reading is the intention of Article 7. Thus, we recommend the committee replace the word from with the word underlying, so that the clause reads, to ensure the effective taxation of income and profits underlying tax-related illicit financial flows. We also recommend that identifying the enabling intermediaries and addressing this essential aspect of cross-border financial flows, illicit ones, not be ignored within Article 7, but we think for clarity This deserves its own independent second sentence, for which we will submit an additional comment letter. Thank you very kindly.

Thank you. CEDD, please.

Thank you, Mr. Chairman. I speak on behalf of the Cabinet des Tides et des Conseils en Environnement et Développement Durable. We support Article 7, and we wish to address one word at its heart, the word illicit. Colleagues have asked why the text does not simply say illegal. The question is legitimate, and we will say in a moment why we joined the request for clarification. But first, the substance. The substance— the 2 words do different work, and the difference is where the developing countries lose the most. Illegal describes conduct contrary to the letter of the law— evasion, fraud, concealment. Nobody in this room defends it, but the largest losses to our treasury suffer come from arrangements designed to defeat a legitimate revenue claim while remaining lawful At every step, profits shifted through chains of entities, exports priced below their value, income made taxable nowhere. Each step is legal in form. The result is illicit in effect. A framework that reached only what is illegal will reach only the clumsy and leave the sophisticated untouched. Now, on where this clarity should live, we note that Article 3 on definition has not yet been taken up and that the committee has wisely decided to keep it for last so that definitions follow the substance rather than constrain it. Precisely for that reason, We will join those colleagues who requested clarification on the weight of the difference between illicit and illegal. When the committee returns to Article 3, the definition should be specific to the service of Article 7 in particular, stating plainly that tax-related illicit financial flows encompasses avoidance as well as evasion, lawful form or not. Where the principal purpose of the defeat of a legitimate revenue claim, and rigorous for all other articles in general, so that every operative provision of this convention rests on terms that no future interpreter is able to narrow. The discipline is already present in the current draft. Principal purpose legitimate revenue claim, exclusion of non-tax crimes. Our request is simply that when Article 3 is finalized, the discipline becomes explicit and untouchable. We support retaining the word illicit, and we stand ready to contribute drafting language for the definition when the committee takes them up. Thank you, Mr. Chairman.

Thank you. And with that, we come We've come to the end of discussing this particular article. We have a little bit time, so we'll give ourselves just 5 minutes. We've been sitting for 2 hours. We'll give ourselves exactly 5 minutes stretch, then we'll go to the next article. So this is just a stretching break, as someone says, a humanitarian break. 5 minutes.

5 minutes.

5 minutes. It's fine.

It's really fine. It's just— Should I send you a WhatsApp?

WhatsApp?

I'll send you a WhatsApp. You delete everything. Those are still the content.

Okay. Okay, welcome back everybody. We now want to move to Article 8, which looks at harmful tax practices. Again, we've made a few revisions to put some more emphasis on international and then regional cooperation, and also Um, look at the basis for what we want to do. So we would like to open the floor again for comments on what has been done so far so that we can refine this particular article also and continue the work. What we'll do is that we'll take as many states as we can. If we're able to finish before time, that's fine. Otherwise, we'll continue tomorrow morning. So with that, I'll give the floor to Cecilia to begin.

Thank you, Mr. Codit, for giving me the floor. We appreciate the changes made to the article. Cecilia would suggest having a definition of the harmful tax practices based on objective criteria in Article 3. We would also like to flag that we don't fully understand what the first paragraph is trying to achieve. because we do not see clearly how harmful tax practices in presumably other countries should not enable countries to tax in accordance with their domestic laws and policies. So we would like to ask other member states to explain their intentions in this article and maybe put it in explanatory notes, as was mentioned for other articles.

Thank you.

Thank you. And the issue of explanatory notes have come over and over again. But we can only explain what we've agreed to. So it's when we come out with our final text and then we give a commentary on it. Without that, it's difficult to give a commentary on something we haven't agreed to. So yes, the idea of explaining is nice, but we'll need to actually do that when we have something that we've agreed to. Then we can explain. Thank you. Explain what we want to say. As an art, more of the verbal explanations we give as we come out with our comments. So that should be noted, please. Silent, please.

Thank you, Mr. Kohlid. This is the Thai first intervention. We would like to thank you, Kohlid, and the Secretary for preparing well-structured draft. We recognize the importance of international cooperation in addressing harmful tax practices. However, we observe that the relationship between Article 8 of this Convention and the work already undertaken in other international forums needs further clarifications. This issue arises in paragraph 1 of Article 8, namely whether the common principle and standard to identify harmful tax practices under this Convention is intended to be the same as, complementary to, or different from the concept, criteria, and assessment mechanism applied under existing international cooperation framework. Without greater clarity of relationship, the development of different standards and parallel assessment process can result in inconsistent inconsistent classification, overlapping review, and additional administrative burden for jurisdictions. We believe that Article 8 should promote coherence with existing international mechanisms rather than result in additional burden for jurisdictions. Therefore, we suggest that Article 8 should take into account the existing assessment and relevant work carried out under other international frameworks to avoid unnecessary duplication while ensuring that the Convention remains responsive to the needs and priorities of all Member States. Thank you.

Thank you. Zambia, please.

Thank you, Chair.

Speaking on behalf of Zambia and the Africa Group, for us Article 8 as it sits now looks more progressive. We have a few enhancements, preliminary. We should provide further text on paragraph 1. But to start with, we do appreciate the issue of ensuring that member states cooperate in ensuring that there's identification and deterrence of harmful tax practices, but the question still remains that we are discussing that probably we may still consider more stronger commitments where members commit to eliminate harmful tax practices. It's something that we need to consider. The issue of developing common principles is also something that we need to consider. Then when we look at paragraph 2, whilst we agree with the issue of exploring appropriate measures, we think that we need to be more proactive. Where the member states should develop and enhance— should develop, enhance, and implement measures, unlike just exploring. So we think that text, if it can be enhanced further to include the words shall develop, enhance, and implement effective tools, and then the effective tools as addressed there are okay with us. We believe that the monitoring and identifying emerging harmful tax practices is one whose criteria should be determined or established by the Conference of the Parties, and therefore consideration may be made that paragraph B should read monitoring and identifying emerging harmful tax practices based on criteria to be established by the Conference of Parties. Similarly, under subparagraph C, the effective taxation of economic activities that benefit from harmful tax practices, it is our proposal that such— we should also say, we should also include that what constitutes this effective taxation should be one that is determined by the Conference of Parties. We say this so that there's more clarity in how harmful tax practices are dealt with, how countries cooperate at international and regional level, and therefore the issue of some of these standards being determined by Conference of Parties becomes key so that there's clarity and consistency in how we are dealing with harmful tax practices. What constitutes harmful practices becomes very key, and therefore Even a definition of that becomes key, and some therefore the Conference of Parties should have more power in guiding the issue of the measures that countries should develop and implement under paragraph two. Paragraph one, as I mentioned, we have our initial comments, but we'll provide further comments during the course of the week through written text. I submit.

Thank you. Austria, please.

Thank you, co-lead. We would like to stress that we appreciate the work done relating to the drafting of Article 8. We think it's important, however, to include the word enhance in paragraph 1 in order to highlight and reflect that there are already existing frameworks that address the issue of harmful tax practices, and we in this context, I want to reiterate the importance to be coordinated and use synergies where there are well-established standards. Thank you.

Thank you. UAE, please.

Thank you, Khalid. We would like to underscore the importance of ensuring coherence with ongoing work in other international fora. Commitments under this article could focus on collaboration with existing bodies to identify and address any remaining gaps. We also consider that paragraph 2 may not be necessary at this stage and could be more appropriately developed in a protocol. Thank you.

Thank you. India, please.

Thank you, Khaled. In line with what we had been saying in the past, that every article should lay out as to what is its purpose and what is the tool that it— tools that it seeks to employ to achieve that purpose. In fact, at the plenary in February, we had suggested some text on those lines, so that text is there, but as time passes, you get more ideas and mistake that for wisdom. So we will also make a suggestion for paragraph 1. For paragraph 2, we are currently okay with that. So paragraph 1, we would suggest that it could read, the state parties shall develop and apply on a non-discriminatory basis common principles and standards to identify harmful tax practices and effectively tax income benefiting from such practices that distort cross-border taxation or erode the tax base of another jurisdiction. The idea is to indicate as to why is it necessary that something is called a harmful tax practice and why does it seek our attention. So we believe that this should be clearly laid out in the opening paragraph of this article, that what it does and what is wrong with that, and paragraph 2 should then lay down as to what are the tools that we seek to employ. So in that direction, I think the current language of paragraph 2 is works for us. So this is our comment at this stage. We will give in a written comment for this article as time goes by. Thank you.

Thank you. Israel, please.

Thank you, Chair. We want to add our call for the other delegate that said that Extensive work has been done in other fora in this very important topic, and we we want that work to be recognized because a lot of countries countries made changes to their domestic law, and we don't. We don't want duplication of provisions, or what we think is that we should handle the gaps that were left in the other work. And we want it to be recognized in this article that we are not going to duplicate the work and make— because we think it will be less transparent if there are so many rules that are not leading to the same place. Thank you.

Thank you. Russian Federation, please.

Thank you very much, Mr. Co-Lead, for giving me the floor. We support the inclusion of this article into the text of the convention. And just like Iran, we'd like to underscore the following. We advocate for, and I've said this repeatedly, putting provisions in that regimes should be based on— should be assessed based on transparent, objective criteria supported by all States and with some means of determining what systems are harmful and which ones aren't. And this will probably be one of the main instruments that needs to be set out in this article.

Why?

Because the wording of the first paragraph in the first sentence, when States Parties need to cooperate with one another at the international and the regional levels, For us, this phrase, as we see it, leaves some indeterminacy because on the one hand, these countries are supposed to cooperate at the international level, but at the regional level, you could read it such that countries need to band together at the regional level to produce their own regional methods. So that's why maybe our proposal is fairly radical. But once more, we repeat and we emphasize the fact that the implementation of the provisions of this article should be grounded on the basis of international principles, and they should be developed perhaps at the United Nations, and they should be unified under the auspices of that organization. Thank you.

Thank you. Indonesia, please.

Thank you, Mr. Kollit, for giving me the floor. We support the inclusion of Article 8, harmful tax practices, since this is very important as one of the issues in the UN Framework Convention. However, on Para 1, we share also the same concern expressed by other delegations Regarding the relationship between the article and existing international agreed principles or standards, we would appreciate further clarification on how this provision is intended to interact with and avoid unnecessary overlap or inconsistency. And also on on the para one, we also appreciate clarification on the reference to the regional cooperation. Since the obligations under this convention are established at international level, and we think it is not necessary to include the reference of regional level on this Para 1. I think also it's— we propose to delete the sentence international and regional levels, so the Para 1 will be more straightforward rather than to put international and regional level. And on Para 2, so far we can agree on Para 2.

Thank you.

Thank you. Belgium, please.

Belgium wants to align with the proposal put forward by Czechia, and as many other colleagues have said, we should build on the work already undertaken, avoid reinventing the wheel, and ensure that there's coordination to prevent duplication of efforts. It's important that we acknowledge the work that is already done and build on that. Thank you.

Thank you. Singapore, please.

Thank you, Co-Lead, for the opportunity to speak. I think we just want to echo the comments earlier, especially those by our colleagues from Thailand, UAE, Indonesia, and others, about the duplication, potential duplication, policies and standards that have already been developed. Countries around have already committed substantial resources to implementing these widely adopted standards, and so we should try and avoid duplicative work and conflicts where possible. If we think parallel frameworks or gaps need to be addressed, then we should clearly articulate those. We also note the TOR expressly requires requires us to take into consideration the work of other relevant forums to reap synergies of the existing tools, etc. So we— to address this, we thought perhaps in paragraphs 1 and 2 to insert that the State Parties shall, taking into account the work of relevant forums, explore appropriate measures or develop and apply common principles and standards. This would address some of these concerns, hopefully. Thank you.

Thank you. Denmark, please.

Thank you for giving me the floor, Mr. Cowley. We want to align ourselves with the statement made by Czechia, Belgium, Austria, and now also Singapore in regards to the work done in other forests. and we believe that the proposal made from Austria on the wording could be a way forward. Thank you.

Okay, we have some stakeholders. CPI, please.

Thank you, Chair. I deliver this intervention on behalf of Greenpeace International, the African Civil Society Working Group on the UN Tax Convention, and also the wider civil society working group through the Global Alliance for Tax Justice. We believe to effectively deliver on Article 8, we propose that we first outline and define what harmful tax practices are to be included under Article 3, and our definition is as follows. I quote, tax practices in one jurisdiction are considered harmful if they undermine the fairness or effectiveness of the tax system in another jurisdiction, end quote. Chair, we propose this clear baseline definition definition, which would mark a vital step towards the global governance of tax. For decades, we have seen an unjust tax system with opaque practices that have undermined the ability of states, particularly those in the Global South, to adequately mobilize critical domestic resources for sustainable development, public services, and also climate action. Crucially, this broad definition will provide the Conference of Parties with adequate room to conduct more thorough assessments to determine what constitutes harmful tax practices. We therefore further propose a new paragraph that provides the Conference of Parties with the mandate to do this. We propose the following text to that effect. I start the quote: The Conference of Parties shall carry out assessments to identify potentially harmful tax practices in relation to all types of taxes. Based on such assessments, the Conference of Parties shall adopt further measures as appropriate and with the aim of promoting the fulfillment of the objectives of this convention, including the identifying and abolishing of harmful tax practices, end quote. Chair, this would ensure that our multilateral framework remains adaptive to emerging tax avoidance schemes and new business models. We therefore propose that the definition is included in Article 3 and that the mandate of the Conference of Parties is to take action should be included under Article 8. I thank you, Chair.

Thank you. Germany, please.

Thank you, Mr.

Colleague.

We support continued efforts and coordination to address harmful tax practices in line with many other delegations that aired their voices before me. of the view that the text should recognize existing international work, including established multilateral standards, and avoid creating parallel assessment mechanisms. Thank you.

Thank you. Okay, I think we have time for one more. China, please. We'll continue.

Thank you, Koli, for giving me this floor. We recognize the significance of international cooperation to identify harmful tax practices and measures to deter them. As for the specific wording, the phrase common principles and standards as used in the first paragraph does not appear to accommodate the varying circumstances of individual states. We would accordingly suggest its deletion. Additionally, we also recommend that paragraph 2 should take into account the works of other platforms. Later, we will submit our written comments.

Thank you. Thank you, China. And basically, our time is up. Let me say something quickly for those of us who might not be aware, at 6 o'clock we lose interpretation, so there won't be any interpretation. So that's why when it gets to the time we cut off, because then we can't translate into the other languages. So for those of us who are not aware, that's why we normally cut off at this time. And so we still have some countries who want to intervene. We'll continue with this article tomorrow morning, those countries will have their time, then the stakeholders also would continue. So with that, I want to say thank you to everybody for your contributions for today. Have a good night, and tomorrow morning, 10 will start. Thank you. Chairman.