Transparency and Anti-Corruption Efforts (NO0036)

Transparency is also a key dimension of the Norwegian recently adopted Action Plan
Against Economic Crime (March 2011). The action plan discusses measures such as
country-by-country reporting (CBCR). CBCR is a different concept from regular
financial reporting as it presents financial information for every country that a company
operates in, rather than a single set of information at a global level. Reporting, for
example, taxes, royalties and bonuses that a multinational company pays to a host
government is likely to show a company’s financial impact in host countries. Such a
transparent approach will also encourage more sustainable businesses.
The Ministry of Finance has in October 2013 proceeded a bill on CBCR to the
Parliament.

24. Transparency and anti-corruption efforts

Commitment Text:

[…] Transparency is also a key dimension of the Norwegian recently adopted Action Plan Against Economic Crime (March 2011). The action plan discusses measures such as country-by-country reporting (CBCR). CBCR is a different concept from regular financial reporting as it presents financial information for every country that a company operates in, rather than a single set of information at a global level. Reporting, for example, taxes, royalties and bonuses that a multinational company pays to a host government is likely to show a company’s financial impact in host countries. Such a transparent approach will also encourage more sustainable businesses.

In October 2011 the European Commission proposed to introduce an EU system of CBCR, to increase transparency regarding payments to governments made by large companies and companies listed in the EU that are active in the extractive and logging industries. The proposal was adopted by the Council and the European Parliament in June 2013.

Norway generally supports the EU- provisions on CBCR. The legislation is in line with the Government’s work related to increased transparency in international payment flows. The legislation is also in line with the Government’s efforts to enter into information agreements with so-called “tax havens” for the purpose of fighting tax evasion. […]

The Norwegian Government appointed a working group in December 2012 to look at national regulation of CBCR. The Ministry received the working group report at the beginning of May, and aims to introduce such requirements from 2014.

COMMITMENT DESCRIPTION

The Ministry of Finance has in October 2013 proceeded a bill on CBCR to the Parliament.

Responsible institution: Ministry of Finance

Supporting institution(s): None

Start date: Ongoing           End date:  Unclear

Editorial note: The text of the commitments was abridged for formatting reasons. For the full text of the commitment, please see http://bit.ly/1QlVIja.

Policy Aim

Country-by-country reporting (CBCR) of financial transactions by international corporations and their subsidiaries is an effort to increase international financial transparency, combat illicit financial flows, and impose appropriate taxation. Inspired by regulatory mechanisms in the United States, CBCR became a priority issue among Norwegian civil society in 2011 and prompted a discussion with the Norwegian Foreign Ministry, which eventually led to the activities described in this commitment.^{[Note 133: “Positiv til land-for-land-rapportering men venter på EU,” Tax Justice Network Norway, accessed October 11, 2016, http://taxjustice.no/ressurser/positiv-til-land-for-land-rapportering-men-venter-pa-eu. ]}

Status

Mid-term: Complete
This commitment was complete at the mid-term when the government proposed the CBCR bill to the parliament. For more information, please see IRM Progress Report 2013-2014.

Did it open government?

Access to information: Marginal 

The commitment opened access to information by increasing private sector transparency. It mandated the disclosure of information such as the registration of company subsidiaries, including those in tax havens. However, some sectors and tax havens are exempt from reporting, and civil society actors have expressed a desire to strengthen the legislation,^{[Note 134: “Hvorfor Norge bør prioritere utvidet land-for-land rapportering,” Publish What You Pay Norway (26 May 2016), accessed October 11, 2016, http://www.publishwhatyoupay.no/nb/node/16898; and ”Land-for-land-rapporteringen må være åpen,” Tax Justice Network Norway (January 27, 2016), accessed September 8, 2016, http://taxjustice.no/ressurser/land-for-land-rapporteringen-ma-vaere-apen.  ]} which is set to be reviewed in 2018. However, proposals have already been made by government ministries to amend the legislation to require less transparency,^{[Note 135: ”Endringer i ligningsloven (land-for-land-rapportering til skattemyndighetene),” Stortinget Prop. 120 L (2015-2016), accessed September 8, 2016, https://www.stortinget.no/no/Saker-og-publikasjoner/Saker/Sak/?p=65606. ]} a move met with strong resistance from civil society. ^{[Note 136: ”Lurer du på hvorfor LLR må være åpen?,” Tax Justice Network Norway (June 15, 2016), accessed September 8, 2016, http://taxjustice.no/ressurser/lurer-du-pa-hvorfor-llr-ma-vaere-apen. ]} The future of this legislation appears unclear at this time. Desk research and interviews conducted by the IRM researcher have not identified any instances in which the CBCR information produced by these activities have been used by civil society to seek accountability. The potential for it is significant, however.

Carried forward?

This commitment has been carried forward in the Norwegian government’s third national action plan, under the following commitment heading: 

8. Study how relevant information related to country-by-country reporting from subsidiaries and support functions in third countries should be presented in the accounts, as well as possible supervisory schemes. (Country-by-country reporting).

The action plan is available on the OGP website.^{[Note 137: ”Norway’s third action plan Open Government Partnership (OGP),” Ministry of Local Government and Modernisation, accessed September 4, 2016, http://www.opengovpartnership.org/wp-content/uploads/2001/01/Norway_2016-17_NAP.pdf.]}