The G8 Summit provides a golden opportunity for G8 leaders to help inspire a “transparency revolution.” While the U.K. holds the presidency of the G8 this year with Prime Minister David Cameron as its representative, President Obama and the U.S. have the opportunity to make transparency a priority at the G8.

The Obama administration has been a global leader in tax transparency, requiring American citizens to disclose their foreign financial accounts, foreign financial institutions to report their American clients, and pressing other countries to share tax information in an effort to curb tax evasion.

At the G8 Summit, President Obama should work to ensure that developing countries are invited to participate in automatic tax information exchange systems, even if they currently lack the capacity to provide information themselves. The U.S. government should also commit to support foreign tax and revenue authorities in developing countries so that they can effectively use and share tax information in the future.

To both complement its efforts on tax transparency and to curb robbery by “phantom firms,” the Obama administration should also take meaningful steps to take the “anonymous” out of anonymous shell companies, fake corporations that serve as fronts for financing terrorism, drug trafficking, human trafficking, money laundering and arms trafficking and that enable corruption and resource exploitation.

President Obama should reiterate his strong support for removing the veil of secrecy that enables phantom firms to operate and encourage other leaders to take bold steps. Greater transparency about who actually owns and controls companies would make it easier for developing countries to crack down on corruption and retain and invest more of their own resources.

The U.S. government has been a leader in transparency for the extractive industries by requiring oil, gas and mining companies to disclose their payments to governments. Measures like this help ensure that citizens of resource-rich countries have access to information necessary for holding their government accountable.

Just earlier this year, the European Parliament approved similar rules, and the Government of Canada announced its intent to follow suit, which is great news. The Obama administration should also encourage other governments – including Australia, Brazil, Japan, and South Africa – to implement similar rules and help set a new global transparency standard for the oil, gas and mining industries.

The Obama administration should further encourage African governments to become transparent in their foreign assistance, extractives, budgets and financial flows. To do this requires real progress on establishing open data standards and teaching citizens’ groups how to use data unleashed by the transparency revolution to hold their leaders accountable.

Finally, the U.S. government should commit to and establish local, multi-sector “transparency partnerships” with developing countries so that citizens and accountability institutions can use data to follow the money flowing in and out of their countries. This can strengthen accountability of the government and deliver improved development results.

Through these policies, the U.S. government can leverage the agenda so that the G8 can put into motion the transparency revolution that we need.

– Matthew Jackoski

Sources: ONE, Thomson Reuters Foundation
Photo: The Guardian