OECD Ministerial: Unlocking Investment for Sustainable Growth and Jobs

oecd_forumBusiness welcomes the focus of this year’s OECD Ministerial meeting, which takes place under the overarching theme of Unlocking investment for Sustainable Growth and Jobs. Industry calls upon the OECD to speak up and convince countries of the need to remove the most persistent barriers to markets and put in place pro-investment policies.

Rob Mulligan, USCIB’s senior vice president for policy and government affairs, is in Paris representing USCIB members at and around the Ministerial and at the OECD’s annual Forum earlier in the week. USCIB represents U.S. business at the Business and Industry Advisory Committee (BIAC) to the OECD, which released a policy statement and recommendations ahead of the Ministerial on investment issues.

“A predictable policy framework and an effective cross-government approach are fundamental for investment,” said USCIB Trade and Investment Committee Chairman Rick Johnston at a ministerial panel discussion on Investment, Innovation and Business Climate. “This is recognized by the newly updated OECD Policy Framework for Investment. Fostering both domestic and foreign investment should be governments’ primary objective”.

The OECD Policy Framework for Investment (PFI) provides an important checklist across a range of different policy areas to assist governments in creating an enabling investment environment. BIAC has been an active partner in the update of the PFI and calls for sustained efforts to ensure its implementation, notably as part of the post-2015 development agenda. BIAC strongly believes that policies that foster innovation and investment opportunities will also be key for the transition to a low-carbon economy.

BIAC also called for strengthening global value chains and financing small- and medium-sized enterprises (SMEs). “Actions are urgently needed to step-up SME financing and enable companies to participate in global value chains”, said Phil O’Reilly, BIAC’s chairman, speaking on June 4 at a BIAC-B20 Turkey special event.

BIAC’s five recommendations on Unlocking Investment for Sustainable Growth and Jobs are laid down in a 2015 Statement to the OECD MCM.

OECD Continues to Review Colombia Accession

As the Organization for Economic Cooperation and Development continues its review of Colombia’s accession process, USCIB and other business groups have raised concerns about the country’s market access. Specifically, industry is concerned about the country’s policies on alcoholic beverages, pharmaceutical and healthcare products, and scrapping incentives.

USCIB worked with the Business and Industry Advisory Committee to the OECD to produce one-page issue papers that were shared with OECD Trade Committee government officials, outlining Colombia’s policies:

The next OECD trade committee meeting will take place in November, at which point the Trade Committee will review whether Colombia has made any adjustments to its market access policies.

Angel Gurría Re-elected Secretary General of the OECD

L-R:  Peter Robinson (USCIB); Angel Gurría (OECD); and Charles Heeter (former BIAC Chairman and USCIB board member); at a 2006 USCIB reception welcoming  Gurria as new OECD S-G).
L-R: Peter Robinson (USCIB); Angel Gurría (OECD); and Charles Heeter (former BIAC Chairman and USCIB board member); at a 2006 USCIB reception welcoming Gurria as new OECD S-G).

Angel Gurría was re-elected secretary general of the OECD on Tuesday, May 26, with a renewed mandate.

“USCIB congratulates Secretary General Gurria on his reelection,” said USCIB President and CEO Peter Robinson. “Through our affiliation with the Business and Industry Advisory Committee to the OECD, we have appreciated the opportunity to work with the Secretary General in providing private sector views to the OECD. We look forward to continuing that relationship during his third term.”

The unanimous decision by the 34 member countries of the OECD to renew secretary general Angel Gurría’s mandate for the period 2016-2021 was an acknowledgment of his work to shape a more relevant, inclusive and open organization.

“I am honored and humbled by the trust and confidence the members have bestowed upon me, and look forward to continuing to transform the OECD into a cutting-edge international organization to promote better policies for better lives,” said Gurría.

Read the full OECD media release.

BIAC: OECD Alcohol Study Misses the Mark

biac-logo-cutThe Business and Industry Advisory Committee to the OECD commended the OECD’s focus on health matters, but said the OECD study on Tackling Harmful Alcohol Use: Economics and Public Health Policy missed an opportunity, saying the report struggles to offer a comprehensive analysis of the reasons and the solutions for alcohol-related harm.

“We need to know more about the effectiveness of policies and innovative solutions that support the health of our people and workforce”, said BIAC Secretary General Bernhard Welschke.

USCIB member DISCUS, the Distilled Spirits Council of the United States, also released a following statement on the OECD alcohol report.

BIAC said its members appreciate the challenge to come to conclusions with a limited set of data and projections, but added that it is important not to jump to narrow conclusions, such as the emphasis on prices, by increasing taxes and setting minimum prices, and greater regulation of advertising as a way to reduce harmful consumption.

In fact, governments and societies need to develop a deeper understanding of the factors that lead to abuse of alcohol and the education and prevention programs designed to curb its incidence that need involvement of all sectors. This was at the heart of recommendations from the BIAC membership that were conveyed to the OECD.

BIAC will continue to facilitate the dialogue on policies and initiatives that allow industry to be a partner in the fight against harmful consumption of alcohol. Industry has been a leader in initiatives to reduce the incidence of underage and binge drinking, and campaigns to improve road safety efforts, among others.

“BIAC is committed to continue its close cooperation with the OECD to consider the serious and widespread efforts business itself is undertaking to prevent the abuse of alcohol and to promote healthy lifestyles,” said Welschke.

 

2015 OECD International Tax Conference: Background Documents

BACKGROUND DOCUMENTS

BEPS Action Plan – Overview

OECD: Addressing BEPS

OECD: Action Plan on BEPS

BIAC Statement of Tax Principles for International Business

BIAC Statement of Tax Best Practices for Engaging with Tax Authorities in Developing Countries

BEPS Discussion Drafts

Current

Past

BEPS 2014 Deliverables

2014 Deliverables

G20 Report on the Impact of BEPS in Low Income Countries

Part 1

Part 2

BEPS Implementation Package February 2015

Action 15

Action 13

Action 5

BIAC and USCIB Comments on BEPS

BIAC

June 2015**
BIAC Comments on the OECD Discussion Draft on BEPS Actions 8: Revisions to Chapter VIII of the Transfer Pricing Guidelines on Cost Contribution Arrangements (CCAs)

May 2015:
BIAC Comments on the OECD Discussion Draft on BEPS Action 3: Strengthening CFC Rules

BIAC Comments on the OECD Discussion Draft on Action 11/ Improving the Analysis of BEPS

BIAC Comments on the OECD Discussion Draft on BEPS Actions 8-10: Revisions to Chapter I of the Transfer Pricing Guidelines (including Risk, Recharacterisation and Special Measures)

April 2015
on the OECD Discussion Draft on BEPS Action 12: Mandatory Disclosure Rules

February 2015
BIAC Comments on the OECD Discussion Draft on BEPS Action 10: The Use of Profit Splits in the Context of the Global Value Chains

BIAC Comments on the OECD Discussion Draft on BEPS Action 10: Transfer Pricing Aspects of Commodities Transactions

BIAC Comments on the OECD Discussion Draft on BEPS Action 4: Interest Deductions and Other Financial Payments

January 2015
BIAC Comments on the OECD Discussion Draft on Action 14: Make Dispute Resolution Mechanisms more Effective

BIAC Comments on the OECD Discussion Draft on BEPS Action 10: Proposed Modifications to Chapter VII to the Transfer Pricing Guidelines Relating to Low Value-Adding Intra-Group Services

BIAC Comments on the OECD Discussion Draft on BEPS Action 7: Preventing the Artificial Avoidance of Permanent Establishment Status

BIAC Comments on the OECD Discussion Draft on BEPS Action 6: Preventing Treaty Abuse

September 2014
OECD’s Request for Input on BEPS Action 11: Establish methodologies to collect and analyze data on BEPS and the actions to address it

April 2014
BIAC Comments on the OECD Discussion Draft on BEPS Action 1: Tax Challenges of the Digital Economy

BIAC Comments on the OECD Discussion Draft on Transfer Pricing Comparability and Developing Countries

BIAC Comments on the OECD Discussion Draft on BEPS Action 6: Preventing the Granting of Treaty Benefits in Inappropriate Circumstances

February 2014
BIAC Comments in response to the OECD Discussion Draft addressing Transfer Pricing Documentation and Country by Country Reporting submitted to OECD (Appendix)

October 2013
BIAC letter to Mike Williams and Pascal Saint-Amans on BEPS

April 2013
BIAC Comments on the February 2013 OECD Report on BEPS

 

USCIB

May 2015**
USCIB Comment Letter on the OECD Discussion Draft on BEPS Actions 8: Revisions to Chapter VIII of the Transfer Pricing Guidelines on Cost Contribution Arrangements (CCAs)

April 2015
USCIB Comment Letter on the OECD Discussion Draft on BEPS Action 3: Strengthening CFC Rules

USCIB Comment Letter on the OECD Discussion Draft on BEPS Action 12: Mandatory Disclosure Rules

February 2015
USCIB Comment Letter on the OECD Discussion Draft on BEPS Action 4: Interest Deductions and Other Financial Payments

USCIB Comment Letter on the OECD Discussion Draft on BEPS Actions 8, 9, and 10: Discussion Draft on Revisions to Chapter 1 of the Transfer Pricing Guidelines (Including Risk, Recharacterisation and Special Measures)

USCIB Comment Letter on the OECD Discussion Draft on BEPS Action 10: Discussion Draft on the use of Profit Splits in the Context of Global Value Chains

January 2015
USCIB Comment Letter on the OECD Discussion Draft on BEPS Action 14: Make Dispute Resolution Mechanisms More Effective

USCIB Comment Letter on the OECD Discussion Draft on Follow Up Work on BEPS Action 6: Preventing Treaty Abuse

USCIB Comment Letter on the OECD Discussion Draft on BEPS Action 7: Prevent the Artificial Avoidance of PE Status

December 2014
USCIB Comment Letter on the OECD Discussion Draft on BEPS Action 10: Proposed Modifications to Chapter VII of the Transfer Pricing Guidelines Relating to Low Value-Adding Intra-Group Services

September 2014
USCIB Comment Letter OECD’s Request for Input on BEPS Action 11: Establish methodologies to collect and analyze data on BEPS and the actions to address it

May 2014
USCIB Comment Letter on the OECD Discussion Draft on BEPS Action 2: Neutralise the effects of Hybrid Mismatch Arrangements (Recommendations for Domestic Laws)

April 2014
USCIB Comment Letter on the OECD Discussion Draft on BEPS Action 2: Neutralise the Effects of Hybrid Mismatch Arrangements (Treaty Issues)

USCIB Response to the OECD’s Discussion Draft on the Tax Challenges of the Digital Economy (the Discussion Draft)

USCIB Comment Letter on the OECD Discussion Draft on Transfer Pricing Comparability Data and Developing Countries

USCIB Comment Letter on the OECD Discussion Draft on BEPS Action 6: Preventing the Granting of Treaty Benefits in Inappropriate Circumstances

February 2014
USCIB Comments on the OECD Discussion Draft on Transfer Pricing Documentation and Country-by Country Reporting

Panelist Materials

“Cross-Border Tax Problems of Investment Funds” by Kim Blanchard

 

**Not included on USB

www.uscibtax.org

Business Supports Economic Integration in Southeast Asia

In the run-up to the launch of the ASEAN Economic Community later this year, the Business and Industry Advisory Committee to the OECD, led by Chair Phil O’Reilly, contributed actively to a series of OECD Southeast Asia Regional Program events held in March in Jakarta, which focused on economic integration in the region. O’Reilly emphasized the importance of this OECD initiative and the benefits that come with good economic governance in the region.

A joint Business Statement by BIAC, the Indonesian Chambers of Commerce and Industry (KADIN), and the ASEAN Business Advisory Council (ASEAN BAC), was presented to regional policymakers and sets out five important steps for economic integration in Southeast Asia. The Business Statement encourages closer cooperation between Southeast Asian countries and the OECD.

Last month the OECD also released its latest Economic Survey on China. Many of the priorities raised by the BIAC China Task Force during the early drafting stage are reflected in the Economic Survey, such as recommendations that all firms should be allowed to compete on a level playing field, and that China needs to scale down state-ownership in commercially-oriented service enterprises and open up more industries for private investment.

USCIB is BIAC’s American affiliate.

Corporate Governance Spotlighted in G20 Istanbul Forum

The OECD Principles of Corporate Governance are being revised with a view to supporting sound financial markets that serve the real economy. The Business and Industry Advisory Committee (BIAC) to the OECD has actively contributed to the discussions and participated in a series of consultations over the last year. On 10 April, the OECD and the G20 are organizing a forum to further discuss the content and the direction of the review of the OECD Principles. It is intended to present the revised Principles at the meeting of G20 Finance Ministers and Central Bank Governors in September 2015 for transmission to the G20 Summit.

The forum will address two specific issues that are of crucial importance to private sector growth: the institutional capacity of small and medium-sized companies to grow and capital market development in emerging market economies. Dan Konigsburg of Deloitte, chair of the BIAC Task Force on Corporate Governance, will represent BIAC as a speaker on the first panel on “Having Finance Serve the Real Economy: Towards New OECD Principles of Corporate Governance.”

Putting ALL Our Minds to Work: Women and Entrepreneurship

4982_image002Entrepreneurship is an important driver of economic development and growth, and a facilitator of empowerment for women around the world. For the past several years, USCIB and BIAC have supported the Organization for Cooperation and Development (OECD) Gender Initiative, which promotes public and private sector collaboration with the aim of removing persistent obstacles to gender equality in education, employment and entrepreneurship as well as measuring and monitoring the progress in achieving this goal together.

USCIB has contributed to two workshops and three reports on women’s empowerment published and organized by BIAC, the most recent of which, “Putting ALL Our Ideas to Work: Women and Entrepreneurship,” was unveiled on March 23 at an OECD gender initiative meeting in Jakarta, Indonesia.

“Our economies cannot afford to miss out on the contributions of talented women entrepreneurs,” wrote Bernhard Welschke, BIAC’s secretary general, in the report’s preface. “BIAC welcomes OECD efforts to mainstream gender equality across various aspects of its work.”

Read the report.

The new report on entrepreneurship offers practical experience to policymakers in identifying best practices, addressing obstacles and implementing policies that will help unleash the potential for women’s entrepreneurship activities. Access to capital remains the biggest obstacle for women entrepreneurs, who own between one fourth and one third of all the world’s businesses.

The report also notes that many multinational corporations understand well the business and economic case for greater participation of women in the workforce and have introduced programs aimed at supporting women-owned businesses and women entrepreneurs. Public policies that foster women entrepreneurs are also key to increasing their numbers and contributing to their success. Regulatory and legal frameworks should not raise barriers to women.

Phil O’Reilly, BIAC’s chairman, unveiled the report at a meeting of the OECD Southeast Asia Gender Initiative. He spoke at a panel about the role gender plays in Southeast Asian businesses, which addressed the challenges and opportunities of achieving gender equality of opportunity in one of the world’s most dynamic regions.

Promoting Inclusive Growth in the Digital Economy

Daniel Sepulveda (U.S. Department of State) gives the keynote luncheon address on the OECD’s role in shaping the future of the digital economy.
Daniel Sepulveda (U.S. Department of State) gives the keynote luncheon address on the OECD’s role in shaping the future of the digital economy.

Information and Communication Technologies (ICTs) hold tremendous potential to create economic opportunity, address social challenges and include everyone in the digital economy. In just a few years, the Internet and related technologies have gone from being mere tools to supporting the foundation of the entire global economy. As an editorial in The New York Times today noted, about half of the world’s population had mobile phone service last year, while one-third of all people used mobile networks to connect to the Internet. Countries that can better leverage the Internet to serve their needs will prosper.

Everybody stands to benefit from the Internet. The Organization for Economic Cooperation and Development (OECD) has pioneered the multi-stakeholder model for Internet governance, ensuring that governments, businesses, members of the technical community and civil society are engaged in dialogues about how the Internet is managed. It is crucial that policymakers understand the role the OECD plays as a forum for building consensus around principles in the ICT space, helping to inform policies that both tap the transformational potential of the Internet for economic growth while ensuring that the benefits of that growth are distributed deeply into society.

To that end, USCIB partnered with the OECD and the Business and Industry Advisory Committee to the OECD (BIAC) to host the ICT conference “Promoting Inclusive Growth in the Digital Economy: The Evidence and Practice Base,” to highlight the OECD’s role in framing policy discussions about the future of the Internet. During this day-long conference, sessions focused on why the ICT sector warrants engagement with all stakeholders, how to enable the benefits of digital innovation across all sectors and what the best ways are to promote trade, inclusion and trust in the digital ecosystem.

“Never has a strong business role in this area been more important than now,” said USCIB President and CEO Peter Robinson in his opening remarks. “It’s important for business executives and government officials to recognize the unique role OECD plays to involve all stakeholders to tap the potential of the Internet.”

Many speakers weighed in on the OECD’s role in shaping the digital economy, including Andrew Wyckoff, the director of the OECD Directorate for Science and Technology, Christopher Painter, U.S. Department of State coordinator for cyber issues and Houlin Zhao, secretary general of the International Telecommunications Union.

Over 100 representatives from government, business, the technical community and the OECD attended the conference. Keynote addresses included an overview of Mexico’s national plan to scale up its ICT infrastructure by Raul Rendon Montemayor, director general for innovation, services and domestic commerce at Mexico’s Ministry of Economy, as well as a review of U.S. efforts to protect privacy and data security in an increasingly connected world by U.S. Federal Trade Commissioner Julie Brill.

“Basic consumer protection principles apply to exciting new technologies,” Brill concluded. “We need to keep consumers front and center.”

Ensuring multi-stakeholder engagement

The OECD stands at the precipice of a global conversation about connectivity that has brought 3 billion people together. During the conference keynote luncheon discussion, deputy assistant secretary of state Daniel Sepulveda, who will serve as vice chair of the OECD steering group for the 2016 Digital Economy Ministerial in Cancun, Mexico, talked about how to ensure that this new connectivity fosters innovation, lifts people out of poverty, increases the productivity of workers, raises wages, and supports the interconnectivity of supply chains.

Sepulveda reiterated that the multi-stakeholder Internet governance model pioneered by the OECD is necessary because it produces better outcomes. He also warned that there is no guarantee that the Internet will evolve in a way that will allow all stakeholders to use it safely and equally. To achieve the twin goals of fairness and safety, governments must embrace the OECD’s principles on digital inclusion and data privacy so as to maximize the benefits of the digital economy.

Participants agreed that private sector opportunities to invest, good infrastructure and cross-border data flows are essential for leveraging the Internet’s transformational power to address economic challenges and raise living standards. The OECD’s multi-stakeholder model has much to be admired, and even though key challenges remain – such as how to properly organize the participation of stakeholders to tap their particular expertise – the best defense of the multi-stakeholder governance model lies in the current resilience and dynamism of the Internet.

The conference ended with a warning about the dangers of forced localization requirements as they relate to the flow of information from one country to another.

“Leveraging the benefits of the cloud doesn’t mean it has to be in your country,” said Joseph Alhadeff, vice president of global public policy at Oracle and chair of BIAC’s Committee on Digital Economy Policy. “The utility of the technology is worth more than its physical location.”

View conference photos (Flickr)

G20 High-Level Conference to Tackle Corruption

A strong BIAC delegation will participate in the Fifth Annual High-Level Anti-Corruption Conference, which is being jointly organized by the Turkish Presidency of the G20 and the OECD and which will take place in Istanbul on March 6. The conference will bring together a wide range of senior experts from the OECD and other international organizations, business community, public institutions and civil society in G20 countries and beyond. The participants will discuss a wide range of issues on the anti-corruption agenda, including compliance versus non-compliance; risks and best practices for fast-growing companies in regional hubs; promoting a safer environment for business at home; emerging issues and innovative solutions. The discussions at the conference will also inform the implementation of the 2015-2016 Anti-Corruption Action Plan and the B20 efforts to fight corruption.  Corinne Lagache, Vice Chair of the BIAC Anti-Bribery/Corruption Task Force, will chair the panel on promoting a safer environment for business at home.