Work networks

Illicit financial flows in the mining sector


In recent years there has been growing concern about the actual level of tax payments made by multinational enterprises worldwide. Thanks to the accumulation of a high degree of economic power, these corporations are better able to adapt to regulatory frameworks and deploy sophisticated strategies for reducing their overall tax burden. The corollary is a lessening of countries' ability to retain fiscal revenues that could be used to finance their development.

At the same time, the international discussions about the financing for development of developing countries has raised the alarm of the growing outflow of capital these countries have experimented due to illicit financial flows.

Most recently, developing countries have shown an interest in coordinating efforts in this area, as they are those most affected by these types of maneuvers due to weak legal and institutional frameworks as well as fiscal systems and tax authorities that are less developed. In this regard it is worth noting the agreement reached at the recent summit in Addis Ababa (July 2015) in which the member states of the United Nations committed to redouble their efforts aimed at substantially reducing illicit financial flows by 2030, with a view to eliminate them completely, in particular by fighting against tax evasion and corruption.

In a number of the countries in the region revenue collection falls in large part on the tax obligations of multinational enterprises, in many cases deriving from the exploitation of natural resources. For example, the contribution of mining revenues during the period 2010-2014 reached 13.8% of total revenues in Chile and 6.4% in Peru; they were also important in Bolivia (2.8%) and Suriname (8.8%). Thus it is fundamental for these economies to limit tax and financial practices that could artificially diminish their tax bases, especially that arising from aggressive tax planning by multinational enterprises operating in the extractive sector. In the same way, illicit financial flows in various countries of the region - especially in South America - could arise from transactions related to natural resources.

In this context, ECLAC is forming a network of policymakers and analysts (NGOs) aimed at following illicit financial flows, tax evasion and the extractive sector within the framework of the project "Illicit financial flows, tax evasion and the extractive sector" sponsored by GIZ (Deutsche Gesellschaft für Internationale Zusammenarbeit).


Two regional events of exchange and dialogue about illicit financial flows, tax eveasion and the extractive have taken place:

  • "Estimating the Tax Non-Compliance in Latin America", August 23-24 in Lima, Peru as part of the CIAT Tax Studies and Research Network, where the participants discussed the impact of illicit financial flows in Latin America and the Caribbean with an emphasis on capital outflows generated by the maiuplation of trade prices of metals and minerals.
  • "Sixth LAC Fiscal Policy Forum", September 26-27 in Buenos Aires, Argentina where the participants discussed recent international taxation trends, including the challenges of tax evasion and avoidance in the mining sector.

Information of interest

Recent presentations:

Related reports and studies:

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Ibero-American Network of Fiscal Policy Makers

In October 2011, in the framework of the XXI Iberoamerican summit held in the same year, the Heads of State and Government tasked the Ibero-American General Secretariat and the Economic Comission for Latin America and the Caribbean -- later expanded to include the Development Centre of the OECD -- to create an Ibero-American Network of Fiscal Policy Makers and Experts.

The objective of this network is to accompany and to facilitate work on fiscal policies within the frameowkr of reforming the State, with the aim of strengthening the processes of economic development.