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20 April 2021 afternoon

2021 - Second part-session Print sitting

Sitting video(s) 1 / 1

Opening of sitting num 11

Vote: The Assembly's vision on the strategic priorities for the Council of Europe

Mr Rik DAEMS

Belgium, ALDE, President of the Assembly

14:03:31

Dear colleagues,

If I may ask you to be seated, so we can start our work.

I still see some short private discussions to my left. So that's done. We still have a big discussion between the lady in light blue and the gentleman with the blue tie. Don't worry, don't worry, I'm not gonna throw anything at you. No problem.

Okay, the sitting is open.

The next item on the agenda is the continuation of the debate on the report titled "The Assembly's vision on the strategic priorities of the Council". We concluded this debate this morning, so this afternoon we will only deal with the amendments. We must finish going through the amendments by 2.30pm. Because then we will have Mr Angel GURRIA and another report.

The Committee on Political Affairs and Democracy has presented a draft resolution to which 15 amendments, one sub-amendment and one oral amendment have been tabled and a draft recommendation to which no amendments have been tabled.

So there is only amendments on the resolution, not on the recommendation. The amendments will be taken in the order in which they appear in the Compendium. I remind you that speeches on amendments are limited to one minute.

We will start with the consideration of the draft resolution and then we will consider the draft recommendation.

First of all, we've got the rejection of amendments in the committee by a two-thirds majority. So under rule 34.12 (which is introduced by resolution to 2350) any amendment which has been rejected by the committee seized for report by a two-thirds majority of the votes cast shall not be put to the vote in the plenary and shall be declared as definitely rejected, unless 10 or more members of the Assembly object.

I understand that the chairperson of the Committee on Political Affairs and Democracy wishes to propose to the Assembly that amendments 13, 4, 3, 14, 15, 5, 6, 8, 7, and 9 to the draft resolution, which were rejected by the committee with a 2/3 majority, be declared as rejected.

Is that so Mr Chair? Yes. It is.

Ok, as nobody objects or maybe if someone objects given it's a two-thirds rejection... I don't see any.

Then amendments 13, 4, 3, 14, 15, 5, 6, 8, 7 and 9 are rejected.

Then we come to amendment number 12. Is that correct, Secretary General? Okay, you have to guide me a little bit.

I call Mr GONCHARENKO to support amendment 12. You have one minute.

Mr Oleksii GONCHARENKO

Ukraine, EC/DA

14:06:48

Dear colleagues,

First of all, I would like to say sorry for being emotional. I think that you can all understand it if you think about the fact that every day, Ukrainian soldiers are killed. We are currently under an enormous amount of pressure.

I was never aware of the rule that we cannot show national flags.

Yesterday one of our colleagues showed photos during the debate and nobody interrupted him. I was not aware of this rule. I'm sorry for this.

About the amendment, it's extremely important. If we are speaking about the Council of Europe, one of the main things is to support peace. This amendment is about the territorial integrity of member states and about needing the peaceful resolution of conflict between the member states of the Council of Europe. I think that is very important.

It's not right, I think, to be in a situation when there is not a single word in the report about this.

I would like to ask everybody to support this amendment. I think it's extremely important and in accordance with the values of the Council of Europe.

Thank you.

Mr Rik DAEMS

Belgium, ALDE, President of the Assembly

14:07:59

Thank you.

Does anyone wish to speak against the amendment?

Mr Rapporteur?

What is happening there?

Is there any mic open somewhere?

Mr Tiny KOX

Netherlands, UEL, Rapporteur

14:08:20

Thank you very much Mr President.

As I said yesterday in the Committee this report focuses on the strategic priorities.

Of course at the beginning of the report it is indicated that the Statute is to be followed each and every day of our existence. That includes territorial integrity and to solve problems with peaceful means.

This is not adding something to our resolution and therefore the Committee follows me in not accepting this amendment.

Thank you very much.

Mr Rik DAEMS

Belgium, ALDE, President of the Assembly

14:08:55

Thank you.

I understand the Committee rejected the amendment Mr Chair?

I shall now put the amendment to the vote.

Members present in the Chamber should use the hemicycle voting system, so those of you here please use the system using your card.

Members participating remotely should vote using the remote voting system.

The vote in the hemicycle and via remote voting is now open.

Are we okay with that?

The vote is open.

The vote is closed.

Results please.

34 in favour, 53 against, 11 abstentions.

The amendment is not carried.

We now go to Amendment 1.

I call on Mr Sergey KISLYAK to support Amendment 1.

Is Mr Sergey KISLYAK online?

You've got 1 minute.

Unmute your microphone, Mr Sergey KISLYAK, we can't hear you. You have to push the little button. You pushed the wrong button apparently. Request the floor again please and then push the right button. Mr Sergey KISLYAK push the right button to unmute please. It's like a small microphone somewhere on your screen. Someone is coming to help you. Just give it a second. There they go with the wrong button again. Request again, Mr Sergey KISLYAK. Okay. Here we go again. Maybe on the third turn it will work. I don't know what's happening there.

You accept the amendment?

Is there someone in the room who can move the amendment then?

Here he is again. Let's see whether it works. Seems like someone is hacking in Russia this time. That was a joke Mr Sergey KISLYAK. Don't get it wrong.

Mr Tiny KOX, if you can move the amendment please.

Mr Tiny KOX

Netherlands, UEL, Rapporteur

14:12:45

 Mr President I would like to move the amendment formally and I accepted it in the committee. Thank you very much.

Mr Rik DAEMS

Belgium, ALDE, President of the Assembly

14:12:53

Chair? The Committee?

Mr Zsolt NÉMETH

Hungary, EC/DA, Chair of the Committee on Political Affairs and Democracy

14:12:55

The committee accepted it.

Mr Rik DAEMS

Belgium, ALDE, President of the Assembly

14:12:56

The committee accepted it.

So, I shall now put the amendment to the vote.

Members present in the chamber, as you know you use the system here. Members remotely, use your remote voting system.

Mr Sergey KISLYAK, your amendment has been forwarded by the rapporteur.

The vote is open.

The vote is closed.

Result: 73 in favour, 21 against, 12 abstentions. So the amendment is carried.

We now come to amendment number 12.

I call Mr GONCHARENKO to support amendment 13. You have one minute.

No? It's gone. So which one do I have to take now becuase...? I do apologise, I didn't have it.

Okay, we've got now amendment number 10.

I call Mr LEITE RAMOS to support amendment 10, you have one minute.

Where is our colleague? Okay, we'll move in the same fashion because otherwise we will be using time.

Okay, Mr Tiny KOX, if you could just take the floor and move it.

Mr Tiny KOX

Netherlands, UEL, Rapporteur

14:15:01

Thank you very much Mr President.

I also move this amendment formally and I accepted it wholeheartedly in the Committee.

Mr Rik DAEMS

Belgium, ALDE, President of the Assembly

14:15:09

Mr Chair, did the Committee accept it?

Mr Zsolt NÉMETH

Hungary, EC/DA, Chair of the Committee on Political Affairs and Democracy

14:15:11

In favour with a large majority.

Mr Rik DAEMS

Belgium, ALDE, President of the Assembly

14:15:13

Thank you.

We will vote now on the amendment.

Is the vote okay?

The vote is open.

The vote is closed.

Results: 103 in favour, 6 against, 8 abstentions.

So Amendment 10 is carried.

We now come to Amendment 2.

If Amendment 2 is agreed to the Oral Amendment 1 will fall.

Now we come to sub-Amendment 1, is that correct?

So, first the main Amendment is moved.

I will call Mr Sergey KISLYAK. I hope that this works now, to support Amendment 2.

Mr Sergey KISLYAK you have one minute.

Mr Sergey KISLYAK

Russian Federation, NR

14:16:36

I hope that you can hear me now.

Mr Rik DAEMS

Belgium, ALDE, President of the Assembly

14:16:40

Yes perfect. Go ahead, you've got 1 minute.

Mr Sergey KISLYAK

Russian Federation, NR

14:16:43

President, first of all what I wanted to point out is that this particular amendment was supported, to a certain extent, by Mr Tiny KOX and it is also associated with number 12.

It involves a change in the wording to replace paragraph 12 with the following paragraph as it appears here.

Thank you.

Mr Rik DAEMS

Belgium, ALDE, President of the Assembly

14:17:19

Thank you.

We will now secondly have the sub-amendment moved.

I think Mr Ahmet YILDIZ is in the room.

Mr Ahmet YILDIZ, if you could move it. You got one minute. Thank you.

Mr Ahmet YILDIZ

Turkey, NR

14:17:36

Thank you very much.

Indeed Islamophobia was forgotten to be added among the causes of civil discrimination, and I urge it to be added.

The rapporteur Mr Tiny KOX thankfully rephrased the paragraph accordingly.

Maybe he can take the floor to explain it.

Thank you.

Mr Rik DAEMS

Belgium, ALDE, President of the Assembly

14:17:58

Okay.

Does anyone wish to speak against the sub-amendment because I have to follow it?

No. I get it.

First of all, I need to have the opinion of Mr Sergey KISLYAK who is the original amendment mover.

What is the opinion of Mr Sergey KISLYAK on the main amendment, are you still there?

We need your opinion on the sub-amendment to your amendment.

 

Mr Sergey KISLYAK

Russian Federation, NR

14:18:34

Yes. I'm referring once again to amendment 2, which concerns paragraph 12.

I would like to draw your attention to adding the particular changes that Mr Tiny KOX proposed in the committee.

I think at this particular point indeed taking this into consideration we can follow what our Turkish colleague proposes, which is adding Islamophobia.

Thank you.

Mr Rik DAEMS

Belgium, ALDE, President of the Assembly

14:19:17

The opinion of the mover of the main amendment no 2, is in favour.

What is the opinion of the committee on the sub-amendment?

Mr Zsolt NÉMETH

Hungary, EC/DA, Chair of the Committee on Political Affairs and Democracy

14:19:25

In favour.

Mr Rik DAEMS

Belgium, ALDE, President of the Assembly

14:19:27

Okay thank you.

The committee is in favour by a large majority.

Therefore I now put the sub-amendment to the vote.

Members present in the chamber and remotely, you know how to vote.

Please vote.

The vote is closed.

Results: 83 in favour, 11 against, 13 abstentions.

The sub-amendment is carried.

We now come back to the main amendment, as amended.

Does anyone wish to speak against the amended amendment?

Just a second. Mr Tiny KOX, you have the floor.

Mr Tiny KOX

Netherlands, UEL, Rapporteur

14:20:33

Thank you very much Mr President.

Although I understand the mover of the amendment and I accepted the sub-amendment, this amendment skips the reference to main conventions such as the Istanbul Convention out of our resolution. That's why I advise the committee not to accept this.

Later I will present an oral amendment which will solve the issue and which everybody would agree with.

I'm not in favour of this amendment, but for an oral amendment later.

Thank you.

Mr Rik DAEMS

Belgium, ALDE, President of the Assembly

14:21:04

What is the opinion of the committee, Chair?

Mr Zsolt NÉMETH

Hungary, EC/DA, Chair of the Committee on Political Affairs and Democracy

14:21:08

 Majority against, a large majority against. 

Mr Rik DAEMS

Belgium, ALDE, President of the Assembly

14:21:12

Okay.

So just to be clear, the Committee is against the amended amendment.

We have the information of the rapporteur who explains that he will, to a certain extent, address the issue later on.

We now put the amendment to the vote.

Just to be clear: we had an original amendment, it has been amended, and the amendment as it stands now is put to the vote and the committee and the rapporteur are against.

The vote is open.

Vote is closed.

Results: 35 in favour, 71 against, 16 abstentions.

The amendment as amended is not carried.

Then we come to the Oral Amendment 1 which has been announced by the rapporteur.

I received one. It reads as follows: 'In draft resolution paragraph 12, delete the second sentence and replace with "It must continue to champion equality and to eliminate discrimination based on racism, antisemitism, neo-Nazism, xenophobia, Islamophobia or any other basis"'.

I accept the oral amendment on the grounds of promoting clarity, accuracy and conciliation basically, because that's what it is in this case.

And if there is no opposition from ten or more members to it being debated.

In my opinion, the oral amendment meets the criteria of Rule 34.7a. Good.

Does anyone object to the oral amendment we have debated now?

I call Mr Tiny KOX to support the oral amendment, please.

Mr Tiny KOX

Netherlands, UEL, Rapporteur

14:23:52

Thank you Mr President.

This is indeed as you said an indicator of conciliation.

I take into account what was said by our colleagues from the Russian delegation and from the Turkish delegation.

The oral amendment meets all this and I think that it would be wise that the Assembly accept this.

Thank you very much.

Mr Rik DAEMS

Belgium, ALDE, President of the Assembly

14:24:13

Thank you.

Does anyone wish to speak against the oral amendment as explained by the rapporteur?

I don't see anyone.

I've got someone asking for the floor.

You've got the floor.

Speaking against.

Mr Hovhannes IGITYAN

Armenia, ALDE

14:24:30

Dear Mr President,

I am not against.

Just for future reference, we need to clarify what Islamophobia means.

We know what Nazism is, we know what anti-Semitism is, and neo-fascism, but I think sometimes we mix Islamophobia with "terrorism-phobia", because I'm sure that in Russia, in Armenia, in many countries, there is not something which is against the religion of Islam, but sometimes we need to fight with you, there must not be equality between Islam-Islam and terrorism-fundamentalism things, which happens in France, for example. We must be very careful, of course, I am not completely against. I am just for giving a description of what it means in the future.

Thank you very much. We can put it for now, but we need a real description of what it means, how it is going in some countries, because in my country we do not have Islamophobia. I do not know what it means.

Thank you very much.

Mr Rik DAEMS

Belgium, ALDE, President of the Assembly

14:25:30

Thank you Mr Hovhannes IGITYAN.

That was kind of an explanation being half against, but in the end of the day not being against and asking for some clarifications in the near future.

I think I said that right.

So the Committee was obviously in favour I get.

Mr Zsolt NÉMETH

Hungary, EC/DA, Chair of the Committee on Political Affairs and Democracy

14:25:52

Okay. the committee was in favour with a large majority. Thank you.

Mr Rik DAEMS

Belgium, ALDE, President of the Assembly

14:25:55

Okay.

The Committee supports the oral amendment with a large majority.

I shall now put to the vote the oral amendment.

My microphone was turned off.

The vote is closed.

That was quick. Didn't even close the vote.

Results: 108 in favour, 2 against and 12 abstentions.

The oral amendment is carried.

I skipped all the already rejected by two-thirds majority not being opposed to amendments, getting me to amendment no 11.

I call Mr Luís LEITE RAMOS to support Amendment 11. You have 1 minute, Mr Luís LEITE RAMOS.

I understand Ms Selin SAYEK BÖKE will present it.

You have the floor.

Ms Selin SAYEK BÖKE

Turkey, SOC

14:27:26

I'd like to propose that we change paragraph 24 where we acknowledge that the Assembly is not only promoting our key conventions, but also ensuring effective implementation.

It's not only the Assembly; we also add the role of local and regional authorities, as well as the conference of international non-governmental organisations as complementary key partners in the Council of Europe's strategic priorities.

Mr Rik DAEMS

Belgium, ALDE, President of the Assembly

14:27:51

Thank you, Ms Selin SAYEK BÖKE.

Does anybody wish to speak against the amendment?

I don't see any. I get that the committee accepted the amendment, Mr. Chair?

Mr Zsolt NÉMETH

Hungary, EC/DA, Chair of the Committee on Political Affairs and Democracy

14:28:05

Yes, with a large majority. Thank you very much.

Mr Rik DAEMS

Belgium, ALDE, President of the Assembly

14:28:08

Amendment 11 has been accepted by the Committee with a large majority.

I shall now put it to the vote.

The vote is open.

The vote is closed.

Result please.

108 in favour, 11 against, 13 abstentions.

The amendment is carried.

We will now proceed to the vote on the draft resolution contained in Document 15252 as we amended it by amendments and including the oral amendment.

We require a simple majority in this case.

Members present in the Chamber use the system here, for remotely use the system on your screen.

The vote on the resolution, and I recall, simple majority, is open.

The vote is closed.

112 in favour, 1 against and 25 abstentions.

The resolution is largely accepted.

We now come to the draft recommendation.

We proceed to the vote on the draft recommendation which is contained in the same Document 15252.

I recall that two-thirds majority is required, counting only affirmative and negative votes. Abstentions do not count in this case.

The vote is open.

The vote is closed.

107 in favour, 1 against and 28 abstentions that do not count.

I'm sorry Mr Tiny KOX it is not unanimous. You lacked one. Let's find the one.

It required a two-thirds majority so the recommendation is accepted.

Madam Secretary General, as you see we did our job from our side and we will happily convey this to you as a recommendation in order to continue the good cooperation that we have between the Assembly, the Committee of Ministers and yourself.

Now I can give you the results on the voting on the Belgian judge.

I can announce that the vote is final.

Results are the following.

Members voting in total: 262.

Spoilt or blank ballots 4, which means votes cast 258.

In order to have an absolute majority you need 130 votes.

The votes were cast as follows in alphabetical order:

Ms Maïté De Rue 81, Mr Frédéric Krenc 148, Ms Sylvie Sarolea 29

So Mr Frédéric Krenc having obtained an absolute majority of votes cast is elected judge of the European Court of Human Rights for a term of office of nine years which shall commence on 13 September 2021.

The next item on the agenda is questions to our Secretary General.

I remind the Assembly that questions must be limited to one minute.

Please colleagues do not make political statements and have it really in terms of questions.

I see that our Secretary General is heading down in order to be confronted with all of your questions.

May I have the question list?

We have, if I get it right, half an hour Madam Secretary General?

So in half an hour probably, Madam Secretary General, we won't be able to have all of them.

We have questions by the political groups as it is a habit. The political groups put their questions separately, answered by the Secretary General, and then after the five political groups we will take them by five.

First on our list is the Socialist Group.

Ms Selin SAYEK BÖKE you have the floor.

You will be followed by Mr Aleksander POCIEJ.

Question time: Ms Marija PEJČINOVIĆ BURIĆ, Secretary General of the Council of Europe

Ms Selin SAYEK BÖKE

Turkey, SOC, Spokesperson for the group

14:34:02

Dear Secretary General, so the challenges to our conventions go hand in hand with an erosion of democracy and rule of law.

What if the withdrawal decision of member states from our very own conventions are not rules-based and democratic?

As such, do you see a role for the Venice Commission as providing an expert opinion regarding how the organisation could approach such an issue?

Second, we have had many problems with finance in the past. What's the current situation we face? And how do you plan on dealing with any challenges?

And finally, Europe and the world is changing at an increasing speed and furthermore our conventions are being challenged by member states, so this becomes an existential stress to our institution. So in this context, are there any concrete steps you plan for as the secretary-general? Would you consider organising a Council of Europe summit at the head of government and state level?

Thank you very much.

Mr Rik DAEMS

Belgium, ALDE, President of the Assembly

14:35:00

Madam Secretary General.

Ms Marija PEJČINOVIĆ-BURIĆ

Secretary General of the Council of Europe

14:35:02

Thank you very much.

So let me start with the convention system, and I think that is a very good start to this discussion and it fits somehow the previous discussions we had here. So today, the Council of Europe has 223 conventions that are in place, but we started earlier on, with what we call now the "mother of all conventions", the European Convention on Human Rights. So I absolutely agree that it is important to preserve and to protect and enhance this common legal space shared by our 47 member states.

So when talking about protection of the convention system, we need to make them functional and we need also for them to be respected by the member states. So I take the example of the two probably crucial instruments in that respect: the European Convention on Human Rights and the European Social Charter, that was also mentioned today several times in different contexts.

So for the European Convention on Human Rights, in order to be protected and to enhance its functionality, it has been a long process, called the Interlaken Reform Process, that has brought many changes to the to this Convention, that made it more functional. While for the European Social Charter System, the considerations are ongoing to reinforce this very important instrument and to make it very useful in the times that we are living through. And again, many of you mentioned the importance of the European Social Charter in this in this respect.

To enhance the system, I think we need to increase the level of implementation of the standards at the national level, but also to address the new challenges, which for instance, as you also debated earlier today, there are two areas that are at the moment very important and we are working on: one is human rights and artificial intelligence. Although you might not immediately see such an importance, it is huge, it is important – other organisations have also started to work on that and our mandate is to respond to the mandate linked with how to develop artificial intelligence, how to make it useful for humanity and our citizens, but at the same time preserve human rights.

And in what concerns the other, which is environmental issues and human rights, that has also been very important and I think also was debated here now. Do we need to refer to the Venice Commission to have opinion on some issues? I can only praise the work of the Venice Commission and it has been very, very good in giving opinions and helping in any pertinent issues, so if need be, I would not exclude that.

For the second question you asked, for the financing, I think it is also very appropriate at this moment to discuss that. We all know that in the past, the Council of Europe has been passing through a very severe financial crisis and that was resolved by starting again, with so-called zero-real growth policy, and the system somehow, finances of the organisation, have been stabilised. But when I say stabilised and I had – and will have – also discussions because also the Parliamentary Assembly is concerned, when you say "real growth", you might think there is a growth in the finances available, however, this means only adjusting the the numbers, the finances, to the inflation at hand. So actually what I am concerned with at the moment, that at this very difficult time, where we are still going through our sanitary crisis, but a sanitary crisis that already showed to have an impact on economic and social life in our member states and at the same time also showed that at this difficult times our mandate proved to be crucial for preserving, in these difficult times, human rights, democracy and the rule of law. So apparently, there is a need to continue working, to continue having a stabilised budget, but at the same time, it is for our member states of course to decide how they go about it.

So my proposal, I just started according to the line which is prescribed by the regulation, I started my talks with the deputies in the Committee of Ministers, and I proposed the same to apply for the next biennium 2022-23. But of course, this is only the beginning of the discussion and let us see how we will go about it. My firm conviction is that we need a stabilised budget if we want to have a good answer, an adequate answer, on the level of all our bodies within our system, to the challenges that are posed.

Let me say with that, because whenever we discuss the budget with the deputies, it is always linked with the reforms, and let me reassure you that the this organisation has been going through reforms, but my deep conviction was that we need to continue to do reforms and organise our work better in this organisation. Also, there is a people strategy, a staff regulation is dated 30 years back, so apparently in many ways, it needs to be modernised and needs to answer the challenges of today. Just to mention one, but there are others.

So when talking about stabilised budget, we also talked about continued reforms and in that respect, related to your previous debate, in my strategic framework one part of my proposal – how to stabilise the financing situation and coherence of our work here – was to make a proposal: because what we have now is biannual budgeting and biannual priorities, so I propose that we move onto four-year programming, so to have a little bit more further-fledged ideas what we should do in the next four years. However, for the time being, and that is my feeling, that for the member states at this moment it is still important to keep on a biannual basis the budgetary side. So again this is a matter of discussion with the Committee of Ministers, but I believe that this four-year programming, if accepted, would certainly add to stabilising financing of this organisation.

And finally, on the issue of the summit. I know that there was a resolution in this Assembly calling for having a summit as soon as possible, because the last one was long ago. And my answer to that – it is not the first time that I've been asked that by parliamentarians – is: I think we need to have a good occasion to have a summit because to gather 47 heads of states and governments, we need a big, important message to deliver. And today again, one of the issues that was raised was the accession of the European Union to the European Convention on Human Rights, which is also their legal obligation under the Lisbon Treaty, but is now this process of negotiations between European Union and the Council of Europe which started in the format of what we call "47 plus". We had already four discussion rounds, it has been impeded a bit by the pandemic, but I think it is important, this time, really to go ahead with that, so if this would be one of the deliverables in some time ahead of us, probably that would be a good occasion to have a summit.

Mr Rik DAEMS

Belgium, ALDE, President of the Assembly

14:44:19

Thank you.

We now move to the second question from the political groups by the EPP group leader, Mr Aleksander POCIEJ, who will be followed by Ms Petra STIENEN.

Mr Aleksander POCIEJ, you've got the floor. One minute.

Microphone please, Mr Aleksander POCIEJ, we can't hear you: turn on your microphone.

Mr Aleksander POCIEJ

Poland, EPP/CD, Spokesperson for the group

14:44:42

Yesterday my very good colleague, the head of the Azeri delegation, Mr Samad SEYIDOV, used a phrase that marked me deeply: We should not speak of a country, but with the country.

And I want to take this advice.

So, it's the question. Later today we will debate the question of Armenian prisoners being held by Azerbaijan. This is a very important issue on a humanitarian and a human rights level.

I would like to know if you have already had occasion to open a dialogue with Baku authorities on this subject.

Furthermore, the European Court of Human Rights denounced the lack of cooperation with regard to this by other regions. What do you intend to do about this?

My second question relates to the current tension in the east of Ukraine due to the attitude of the Russian Federation. Faced with this very preoccupying situation and the attitude of Moscow with threats to peace and security, what action do you think to take?

Mr Rik DAEMS

Belgium, ALDE, President of the Assembly

14:46:02

Thank you Mr Aleksander POCIEJ.

Madam Secretary General.

Ms Marija PEJČINOVIĆ-BURIĆ

Secretary General of the Council of Europe

14:46:05

Thank you very much.

I absolutely agree that it's always especially in the family of 47 to talk with them about, but sometimes both approaches are needed. The way to engage with the country is certainly in dialogue with the country. I think that is a very basic principle of work of this organisation. It needs to be cherished in the most difficult situation when they are at hand and in this situation for the crisis in and around the Nagorno-Karabakh. I think that goes without saying that the dialogue is the first thing.

Several times when the crisis erupted I have called for peaceful resolution because that was what our two countries, two member States, have committed to when they acceded to the Council of Europe.

Unfortunately, the were broke out, and there are consequences, like in any war, very unfortunate ones. I was welcoming, of course, the November ceasefire. The very important part of the work is now after the ceasefire is to be respected and, of course, to work for lasting peace. But for working on lasting peace, I think trust is the first part to be taken. In that respect I can only say that because they are, I wouldn't say every day, but here and then there are incidents coming and some speeches that do not go along that line. So, I would say that all that are concerned with this should faithfully and courageously, because both is needed, faithfulness and courage, to engage to preserving the dignity of all parties. I think that's basic. Once we start with that, when we achieve that, then probably the next move can be can be done.

Now when it comes to the to the Council of Europe, immediately after the ceasefire we examined what is within the mandate of this organization, what we can do. Obviously, one thing which we are already working with some other member States is confidence-building measures.

So, the first step to take was by the end of November to engage with both capitals, with Baku and with Yerevan. I sent a high-level delegation from the Secretariat to talk to both sides to explore "what can we do on that front".

I'm happy that the two meetings were held, one in the beginning of December and the other by the end of December or beginning of January, and that there is a number of things that we can propose and, of course, need to be accepted by both parties to work along that path. This the answer from what the Council of Europe can do, what is within our mandate to work in order to strive for lasting peace. Of course, there are other bodies that are working on the longer lasting solution, so this is up to others that they engage with that.

For the second question, I can again say that we are not the UN or the OECE. We cannot engage with the security issues, but, of course, what is concerning about this part of Ukraine and the border with Russia is certainly the human rights issues. This is the part where we can engage and where the Council of Europe's mandate fit within this situation.

Mr Rik DAEMS

Belgium, ALDE, President of the Assembly

14:50:36

Thank you.

We will now move to the third group.

May I ask to speed up a little bit if it is possible because we have our next debate at 3 p.m.

For the Alliance of Liberals and Democrats for Europe we've got Ms Petra STIENEN, followed by Mr Oleksii GONCHARENKO in the room.

Ms Petra STIENEN, you have the floor.

Ms Petra STIENEN

Netherlands, ALDE, Spokesperson for the group

14:50:54

Thank you Mr President.

Dear Madam Secretary General,

It makes me proud to be a member of an organisation that has a gold standard where we all together make efforts to protect women and girls from the violence that they face every day in our societies.

This gold standard is the Istanbul Convention. And what a beautiful name it is indeed. That beautiful city where even Turkey signed the convention 10 years ago.

But it's clear to all of us that some member states of the Council of Europe - politicians, opinion leaders, journalists, activists - are attacking this Istanbul Convention on the basis of misinformation about the intentions behind the Istanbul Convention.

So Madam Secretary General, how will you make sure that this important convention will not become part of a proxy fight between on the one hand the conservative forces in our society, and on the other hand progressive forces.

How can you make sure that this Istanbul Convention remains the best way to ensure that our governments, but also our people, support and establish policies to prevent and protect women from violence and prosecute the perpetrators.

Thank you.

Mr Rik DAEMS

Belgium, ALDE, President of the Assembly

14:52:11

Madam Secretary General, I will take the other two group's questions first because we are running into a bit of a time squeeze.

Mr Oleksii GONCHARENKO on behalf of the European Conservatives Group you've got one minute.

 

Mr Oleksii GONCHARENKO

Ukraine, EC/DA, Spokesperson for the group

14:52:24

Thank you Madam Secretary General.

In 1949 this organisation was created after the Second World War, Great War, and one of the aims was to prevent wars in Europe.

Now we are very close to a new big war. More than 150,000 Russian troops are on the Ukrainian borders. Russia closed the Kerch Strait absolutely brutally neglecting international law and that of the sea.

What will be done and what can be done by the Council of Europe to prevent the big war and what can be done and what will be done by the Council of Europe if Putin starts a big aggression and a big escalation against Ukraine?

Thank you so much.

Mr Rik DAEMS

Belgium, ALDE, President of the Assembly

14:53:08

Thank you.

We will now have the question by UEL, Mr Momodou Malcolm JALLOW.

Mr Momodou Malcolm JALLOW, you've got the floor, if you're online.

You got the floor.

Mr Momodou Malcolm JALLOW

Sweden, UEL, Spokesperson for the group

14:53:40

Yes. I hope you can hear me clearly.

My question is: we have seen and continue to witness growing challenges to human rights standards and principles in all our member states.

We have seen Afrophobia or anti-black racism increase, we have seen anti-Semitism, Islamophobia, anti-Gypsyism reach alarming levels.

The hostility to human rights as universal, indivisible, and legally binding has increased, fuelling a hateful narrative and a growing structural institutional racism that we see.

While the Black Lives Matter movement has put the spotlight on existing Afrophobic and racist structures, Covid-19 has also both revealed and amplified existing structural and institutional inequalities in Europe.

So how does this fit into your strategic priorities? And can you share with us how you intend to make sure that we can preserve, protect and enhance fundamental human rights for vulnerable groups in Europe?

Thank you.

Mr Rik DAEMS

Belgium, ALDE, President of the Assembly

14:54:41

Thank you.

Madam Secretary General.

Ms Marija PEJČINOVIĆ-BURIĆ

Secretary General of the Council of Europe

14:54:44

Let me start with the first question, which is about the Istanbul Convention.

Of course, I imagine that the question was pulled by the fact that, unfortunately, Turkey has announced the denouncing of this gold standard, which I deeply share your opinion on this important human rights instrument.

Let me say that this is the first time in the history of this organisation that a member State is withdrawing from a human rights instrument of these fundamental values. This is really a big, I would say, attack on multilateralism and and human rights collective protection, which is the base of this organisation but also of all multilateralism created after the Second World War.

To answer your question, what we can do, because they are those who are attacking based on misinformation and to avoid the proxy fight. Of course, from the Council of Europe's side we intend to expand the circle of those who are committed to the Treaty. We have two member States outside of Europe who have asked for membership in the Istanbul Convention, and we have some member States that are along the way of ratifying. Certainly that will give a new boost to the Treaty.

What I think is important is to develop and promote a positive and honest narrative on what this Convention is about. It is about and only about violence against women and domestic violence, which is, and I think that was also mentioned several times during even this session, this is a violation of human rights in a very negative way. Having in mind not only COVID, but OVID exacerbated the situation for women and raised the numbers of women who are suffering from domestic violence. Certainly, this is a big problem not only in Europe but around the world. We intend to work more on that.

Just let me say and underline one fact, because sometimes it is said that there are very good national laws that protect women against against domestic violence. Actually, the fact is that the Istanbul Convention, the standard set there, is significantly higher than national laws of many countries, and the Convention provides monitoring mechanisms. That's very important for the protection of women of all our member States.

The Council of Europe will certainly be more vocal on working against the misconception, and I will hear, just call and finish with this, the Armenian government asked the Venice Commission on the constitutionality of the Istanbul Convention with the constitution of Armenia. The Venice Commission, because of the question you asked, because this is the issue that is also raised in some other countries gave a very good answer, very detailed answer, that can be used not only by Armenia once it decides to go on with ratification, but by any other member States who have signed or want to ratify, to answer all the question. that might be raised from there. It's a very good document and it should be used more.

Now to the issue of, again, I think a very similar question from what I answered to Mr Aleksander POCIEJ, what to do to help Ukraine and the fact that there are at the borders more military effectives from Russia. 

The Council of Europe is not part of the Minsk Process but fully supports the implementation of the Minsk Agreements and all the diplomatic efforts to this de-escalate tensions. Actually, we are not directly involved in the peaceful settlement of the conflict but we are concerned by the humanitarian and human rights aspect. Of course, there are very clear legal obligations on member States, on all member States, to ensure that every individual's human rights are respected.

Let me finish saying that the Council of Europe fully supports Ukrainian sovereignty and territorial integrity and will do so in the future.

Now to the question of all sorts of discrimination and the action on the side of the Council of Europe, but probably this time shedding more light on the racism that was brought to light more in Europe after the tragic death of George Floyd in the U.S. It is indeed felt to be deeply rooted in the institutions that there is something about systemic racism. ECRI, our European Convention on Against Racism and Intolerance, has last September issued a statement on racial profiling and systemic racism.

Let me underline that the European Convention on Human Rights in its Article 14 is clearly prohibiting discrimination on grounds of race. That is a very foundation on which all our action is inspired by, and bodies within our system like the newly formed Steering Committee Against Discrimination and Intolerance is strengthening the intergovernmental work in that area.

Now to show how determined we are to work across our organisation on that, just these days we had an online dialogue between leading sports figures. Sports, in football matches, there is always an arena for a lot of anti-discriminatory speech. Our Deputy Secretary General, the French Minister, Sports Minister, the ECRI Chair, Dutch football player Clarence Seedorf and some others worked on that.

I think discussing and addressing racism, homophobia and, of course, other manifestations of hate speech is very important not only in football matches but elsewhere as well. We are very much committed to working toward and continuing to enlarge our work on anti-discrimination.

Mr Rik DAEMS

Belgium, ALDE, President of the Assembly

15:02:25

Well, we do not really have any more time so I do apologise, Madam Secretary General, that we have to finish up because we have our other debate which is going to start. Maybe in the future we might seek to have a little bit more time in our agendas, both yours and ourselves, in order to address some more questions. I am very sad and sorry, but okay, we've got Ángel Gurría who is waiting. So I'm in the middle of Secretary Generals here. Yourself, mine - well not mine - the one of the assembly, and of the OECD. I do apologise. Thank you much, Madam Secretary General.

Okay. The next item of business at this sitting is the enlarged debate on "Fighting fiscal injustice: the work of the OECD on taxation of digital economy".

This debate, dear colleagues, will take place under special rules which enable delegations from parliaments of non-European member states of the OECD to participate and therefore we welcome the participation of our colleagues from Canada and Mexico. And I see on my screen my good friend Ángel Gurría. "Hello, Ángel, I hope you are well" [in Spanish].

It is my privilege to welcome you again within our Assembly, which we have enlarged for the occasion to include delegations of national parliaments of OECD member states, which are not members of the Council of Europe, and the delegations from the European Parliament.

May I recall to you and all of our colleagues that in January 2019, when I started my presidency, we decided on a renewed approach of our long-standing cooperation aimed at a stronger and more efficient institutional relationship, in particular by deciding that debates of this last Assembly should focus on specific themes.

Now, the theme "Fighting fiscal injustice: the work of the OECD on taxation of digital economy" is obviously highly topical and has seen some recent development and, as I know you, you probably will have some important news to share with us.

Now we had the opportunity to have an enlightened exchange of views with you at a meeting of our standing committee in October 2020, where you reported already on the remarkable work done by the OECD under your leadership to build a fairer and more transparent international tax system.

You know your organisation, which symbolises the strength of multilateralism, plays a key role in building consensus and coordinated international policy responses in this area.

Now, dear Secretary General, dear Mr Ángel Gurría, this will be in principle your last participation in this chamber as OECD Secretary General. I said very specifically 'as OECD Secretary General' because as we discussed last time, you never know how we can meet again.

Now, on behalf of all the members of the Assembly and certainly also my personal behalf, let me tell you how much we have always appreciated our regular exchanges with you. I would like to sincerely thank you for your long-standing dedication and commitment to our institutional partnership and dialogue. I am sure that the members of the enlarged plenary also share this assessment.

As far as the meeting concerned, dear colleagues, dear Ángel Gurría, we will begin with the presentation of our rapporteurs, which basically means the presentation by Mr Georgios KATROUGKALOS on behalf of the Committee on Political Affairs and Democracy of its report on "Fighting fiscal injustice: the work of the OECD on taxation of digital economy".

We will then hear an opinion from Ms Selin SAYEK BÖKE on behalf of the Committee on Social Affairs, Health and Sustainable Development, after which I will invite you, the Secretary General, to address our meeting.

Just in terms of practical information for all of us, the debate has to finish at 5pm. So I will interrupt the speakers at 4:45 p.m. The rapporteur has seven minutes to present the report and then we'll have a further three minutes to reply to the debate at the end. Committee contributors and participants in the general debate have three minutes. There we go. Let's head into this.

Mr Georgios KATROUGKALOS, you have the floor for seven minutes.

Debate: Fighting fiscal injustice: the work of the OECD on taxation of digital economy

Mr Georgios KATROUGKALOS

Greece, UEL, Rapporteur

15:06:50

Thank you, Mr Chair.

Allow me to begin with a few words for Mr Angel GURRÍA, because we are very close to a historical compromise, which would be impossible just some years ago. And it would not be possible at all without Mr Angel GURRÍA.

Mr Angel GURRÍA, after an unprecedented low of three continuous terms, is leaving an OECD now very different than the one existing when he took his functions. He has not only has broadened the organisation with new countries, many more waiting at its front door, above all, he has infused it with a new philosophy, a new narrative, much different that the initial concept of a club of the rich countries. This narrative associates growth with the well-being of the people, with fairness, with the fight against inequalities, exclusion and for a global agenda, including the Paris Agreement on Climate and the United Nations Sustainable Development Goals. So many thanks to him.

Many thanks also to the Secretariat, especially Ms Despina Chatzivassiliou-Tsovilis, for her much appreciated assistance. Also to our colleague Ms Selin SAYEK BÖKE in the Committee on Social Affairs, Health and Sustainable Development for her very valuable opinion.

Dear colleagues, even before COVID-19, we had very good reasons for a broad global action form. Inequalities have been on a steep rise, the social state and public services have been eroded and degraded much before the pandemic. Nowadays, close to 40 per cent of multinational profits are sifted to tax havens, with the European countries being amongst the biggest losers. Countries are losing globally a total of over 427 billion each year to corporate tax abuse. And the digitalisation of the economy, and the rise of the tech giants, the notorious GAFA -Google, Amazon, Facebook, Apple- has exacerbated this situation through aggressive tax planning, tax avoidance and artificial profit-shifting practices. The profits of the multinational digital companies have reached historical records. For instance, Apple's sales have surged over 1 200 per cent in the last decade. Now, the net value of the GAFA is more than the aggregate value of all companies present at the European stock exchanges, including the European Union, the City and Zurich's stock exchanges.

And, of course, fiscal justice is especially important in times of crisis like this one of the pandemic. Both regarding the necessity to strengthen the resilience of public finance and also for the protection of the more vulnerable, because the pandemic exacerbates even further the trends I have already mentioned. A recent Oxfam report is speaking of COVID-19 as "the Inequality Virus". So the profits of GAFA have become even bigger. Amazon sales have swelled in just one session to show us to add 13 billion dollars to the net worth of its CEO. And, quite on the contrary, because of the shrinking of the economy, the last two years tax revenues fell across the OECD for the first time in a decade.

Moreover, due to the extraordinary measures necessary to face the economic and social challenges of the pandemic, our countries are now piling mountains of debt. The average increase for advanced economies is estimated at around 20 per cent of GDP, and in order to face the situation, OECD proposals call for a holistic approach: they are separated into pillars. The first one, addresses the broader issues of taxation of the digital economy and focuses on how profits are allocated among states, among jurisdictions. According to the new proposed rules, multinational digital companies shall be taxed according to where they provide their services, not just according to in which country they are legally based, legally established. The second pillar is focused on the establishment of a global minimum tax, thus reducing the incentives to shift profits to lower tax jurisdictions. My report, repeating what our Assembly has said in the past, underscores that the ability of governments to raise funds is a fundamental answer for democracy. And the Committee on Social Affairs, Health and Sustainable Development has very constantly added for social justice, as well.

So, the resolution calls our states to support a consensus-based agreement, and with the very much again welcome of this Committee on Social Affairs, Health and Sustainable Development, calls to our states, if unanimity is not insured, to proceed with a broad multilateral consensus, like did 2021. Still we have good news, when 5 April, the American Minister of Finance, Ms Yellen, has called for a global minimum corporate tax to prevent companies from evading taxes. The G20 finance ministers have followed close in days after this declaration and, according to Ms Yellen, the rationale behind the global minimum corporate tax is exactly to stop the race to the bottom. This is exactly the central idea of my report and the resolution. Of course, many issues are still open. First of all, the exact rate of the tax. The USA is speaking of renewing a tax of the order of 21 per cent; in Europe we would like to have a higher rate than that. They should promote willingness among countries to reach a fair and broad compromise.

But allow me, Mr President, to close again with a reference to Mr Angel GURRÍA, with a more personal tone this time. I had the privilege to work with him through more than one ministerial post of the government of Greece during the economic crisis. I can assure you that he was not just supportive, his style was exactly the inverse negative of the manipulative and often insulting behaviour of some representatives of other international organisations, like the IMF. Mr Angel GURRÍA is leaving the OECD, but make no mistake, he is a force of nature bigger than life. I am sure that we will all have the good luck to work again with him, from other positions.

Many thanks. Many thanks. Thank you.  

Mr Rik DAEMS

Belgium, ALDE, President of the Assembly

15:13:57

Thank you. That was a good remark. Mr Angel GURRIA might be leaving but he's not gone. I know that.

Anyway, let's head on now to the opinion of the Committee on Social Affairs, Health and Sustainable Development which will be delivered by Ms Selin SAYEK BÖKE.

You've got three minutes Selin.

You have the floor.

Ms Selin SAYEK BÖKE

Turkey, SOC, Rapporteur for opinion ; Committee on Social Affairs, Health and Sustainable Development

15:14:16

Thank you very much, Mister President.

Firstly, as the repertoire for opinion on the activities of the OECD on behalf of the Committee on Social Affairs, I'd like to thank Mr Georgios KATROUGKALOS for his constructive approach in preparing this report on the OECD's commendable work on digital taxation for the Political Affairs Committee.

Also, I'd like to thank the Political Affairs Committee for their unanimous support of most of our amendments.

I do share Mr Georgios KATROUGKALOS's kind and grateful words regarding Mr Ángel Gurría, and I send my best regards as well.

The Covid pandemic has made the existing socio-economic inequalities that much more visible, and it is even further deepening it. This has enhanced the resentments regarding social and fiscal injustices across our geography and across the world. Therefore, there seems to be an urgent need to ensure that we revisit the welfare state in not only public provision of basic services and protection of human rights in this sense, but also as a capacity of redistributes of tax policies, where instead of racing to the bottom we ensure a fair and equitable tax system.

The need is not just for more fiscal resources, but to ensure a more just distribution as well. Indeed, our states can no longer tolerate the tax avoidance of businesses be it large multinational firms or local rent seekers who are seeking out to avoid the taxes that are very critical for the billions across the world.

Now, we understand that digitalisation has facilitated this track tax shifting, has given an edge to the more digitalised companies compared to the traditional businesses, a wedge towards rent seekers compared to the more productive capacity and focus firms.

Therefore, adopting an international tax system at a digital age that will ensure a level playing field between these enterprises of productive forces, rather than rent seeking and one that actually cares for social causes as well, is extremely critical. We could call this a digital tax justice in a period where everything is becoming digitalised. The OECD itself actually has put forth an economic assessment showing that closing these digital taxation loopholes through a multilateral and inclusive framework that the OECD has been rightfully pushing for could increase global corporate income taxes by 50 to 80 billion dollars per year. This is immense and very valuable resources at a time where we need to ensure basic universal public service provision.

Clearly, our ultimate aim has to be keeping that multilateral framework, but if need be without losing the multilateral focus, a piecemeal effort sequencing of the pillars could also be considered. Finally, attract tax transparency should be an integral part of any effort we take.

As such, we care deeply for keeping a social justice focus together with fiscal justice, as well as ensuring climate justice and strengthening the multilateral framework.

Thank you very much

Mr Rik DAEMS

Belgium, ALDE, President of the Assembly

15:17:36

Thank you Ms Selin SAYEK BÖKE.

We now come to the address by Mr Gurría, Secretary General of the Organisation for Economic Cooperation and Development.

Once again, Ángel, I welcome you. Let's hope that we will see each other some other day physically, maybe a small tequila, I don't know, we'll see. But anyway you do not have a time limit, I wouldn't dare to impose one on you, but please leave little bit of space for our colleagues to put some questions. But still we are very interested in hearing you on this.

So without any due delay my good friend, you have the floor.

Mr Angel GURRIA

Secretary General of the OECD

15:18:14

Dear friends, distinguished Members of Parliament, dearest Chair, dearest Mr Georgios KATROUGKALOS,

Thank you very much too for the good wishes of our opinion maker today, Ms Selin SAYEK BÖKE.

Let me say that Mr Georgios KATROUGKALOS is a good friend of the OECD and author of this year’s report, and the rapporteur, Ms. Selin SAYEK BÖKE, they have been working together and also with us to prepare this presentation. But I also want to pay tribute to the Assembly and to this fruitful partnership, as you mentioned, this is the last time I will participate in this exercise as OECD Secretary-General. I have to say it has been a true pleasure and a privilege. And it has been fun also. So, thank you for that.

Moreover, in my time at the OECD I have experienced the value of incorporating parliaments and legislatures, MPs and senators, into the life of the Organisation. You and your fellow legislators around the world have often been fundamental to advancing the OECD’s mission of 'Better Policies for Better Lives' – that's our motto! Indeed, we know that parliamentarians in particular share that important aim with the OECD.

Now let me start with the global economic outlook. Global GDP fell by 3.5% during 2020, and we project 5.6% growth this year. World output should return to pre-crisis levels by mid-2021. These are the global numbers. This projection crucially depends on the race between the vaccination rate and the spread of emerging variants of the virus.

However, this recovery will be uneven across the globe. Many countries may need more time to return to pre-crisis levels. Governments must continue to provide fiscal support. They must actively use policy instruments to restore our economies, and promote inclusive, resilient and sustainable growth.

Let me discuss three ways with which we can build forward better, beyond GDP.

First, the recovery is an opportunity to make growth greener. Recent commitments by many countries to achieve carbon neutrality, or what is known today as “net zero” emissions by 2050 are encouraging. But we need a big fat tax on carbon! Around 60% of energy-related CO2 emissions from advanced and emerging economies are entirely unpriced! 60%. Unpriced. And only around 17% of emissions are priced at or above the EUR 30 per tonne of the CO2. They should today be at about 60. This is the cost of the damage that is done by CO2. We will soon launch a new International Programme for Action on Climate (IPAC), led by France, to support countries to implement the goals of the Paris Agreement.

Second, the OECD can make the recovery more inclusive by solving the fiscal challenges from the digitalisation of the economy. We are at a critical juncture in the negotiations among the 139 member countries. It's called the Inclusive Framework on BEPS (Base Erosion and Profit Shifting) on how to address digitalisation’s tax challenges and how to modernise the international tax system.

The United States’ recent announcement of its major proposals has given the negotiations a renewed boost and may well unlock some of the major sticking points. We greatly welcome the constructive engagement by the US. Now, these recent moves, signals, are a real change, because they give us a chance of reaching a political agreement by mid-2021, which is the date mandated by the G20. And this will allow important progress in our efforts to build a fairer and more transparent globalisation.

And third, the OECD will continue to tackle international tax evasion and avoidance. From our tax transparency efforts, Mr Chairman, members have already received 107 billion euros of additional revenues in tax, interest and penalties. So in the last 10 years already 107 billion euros have been received. But bank deposits in international financial centres fell by 410 billion, which is about a third. And then information on 36,000 tax rulings were shared between jurisdictions, they are no longer secret. And let me tell you more: In 2019, nearly 100 jurisdictions exchanged information automatically, that means you don't have to wait for someone to ask for it, they exchanged information automatically on 84 million financial accounts, involving total assets of around 10 trillion euros. That's about half the size of the US economy, Mr Chairman, just to put it in context.

So the relationship between the OECD and the Council of Europe on tax transparency issues has flourished, namely through the development of the Multilateral Convention on Mutual Administrative Assistance in Tax Matters, it's a long title! Multilateral Convention on Mutual Administrative Assistance in Tax Matters. For short it's called the “MAC”. And today, the MAC is the world’s most powerful exchange of information treaty, with over 140 jurisdictions participating.

As my tenure as Secretary-General comes to an end, I'd like to reiterate that without this instrument, the MAC, we would not have reached such great success on tax transparency. And we might not have been able to advance to the cusp of the global agreement that we seek now on digital taxation. From the first days of our tax work, the Council of Europe has kept the faith with the OECD, and we have done great things together. That, my friends, is multilateral co-operation for real – better policies, for better lives.

So, dear Members of this Assembly,

The Covid-19 pandemic has brought so much pain, so much hardship, so much uncertainty, but it has also brought a unique opportunity to build forward better, more sustainably and more inclusively. Our new Going for Growth 2021 report, which I launched only last week, provides first-hand, country-specific OECD reform advice on how to do just that.

You can count on the OECD to continue working with you, continue working for you, to keep up the fight and to shape a post-Covid world that is more inclusive, that is fairer, that is greener.

I look forward to your comments and your questions.

Thank you.

Mr Rik DAEMS

Belgium, ALDE, President of the Assembly

15:28:36

Thank you Mr Secretary General for, as always, your inspiring words.

When you mentioned this 107 billion dollar tax revenue it made me think of an American series in the 1970s. I just looked it up. I don't know whether you know it, but that was a series that was called The Six Million Dollar Man. You know that? With Lee Majors, the bionic guy. Well, let me say that Mr Secretary General, he may have been the "Six Million Dollar Man" but you're the "one hundred billion dollar man".

Super. Fantastic, with as you say MAC.

Well, thank you for your address. We will certainly have the occasion to continue dialogue with you and we will never lose contact. As you know, as you say, this is maybe your last appearance as Secretary General of the OECD, but we certainly will not be strangers.

Having said this we now come to the list of speakers.

The first speaker on my list, we have traditionallly Ms Secretary General, we've got five political groups that go first, and the first on my list is Mr Paul GAVAN from the Group of the Unified European Left.

Mr Paul GAVAN you have the floor, followed by Mr Gerardo GIOVAGNOLI.

Mr Paul GAVAN

Ireland, UEL, Spokesperson for the group

15:29:58

Thank you, Mister President.

I just want to begin by congratulating the rapporteur on behalf of our group, the Unified European Left. I want to warmly welcome this draft resolution on fighting fiscal injustice and the taxation of the global digital economy.

Our group congratulates the rapporteur for his content, offer our full support and note the significance of the timing of this resolution.

Thankfully, after four decades of a race to the bottom in taxation of corporations we may finally be close to a turning point.

It's worth reflecting on what has been witnessed over the past 40 years: a never-ending succession of tax cuts for some of the wealthiest corporations across the globe. Ruthless competition for FDI (Foreign Direct Investment) between countries, which combined with a plethora of roses, scams and legal dodges, has seen a shrinking of the overall tax burden for the corporate sector. This in turn has seen a shortfall in public finances available for essential public services across all states.

The combined impact of all of this has been a dramatic and scandalous transfer of wealth from public coffers to private corporations, but disastrous consequences for public investments and the public good.

The figures set out on this report are stark. In 1980 corporate tax rates around the world averaged 40.28%. In 2019 the average was just 24.18%.

By the way, the headline this weekend in the Irish Times related to a 75 billion tax-free profit shifted through my country using the Double Irish: 75 billion in one year.

For me the most important point in the document is contained in Point 1. The ability of governments to raise funds through taxation necessary for the funding of public services is a fundamental anchor of democracy. We've seen in recent decades a lot of confidence in democratic institutions to deliver to people and communities right across Europe. I believe this is very much tied to constraints imposed on public finances by years of ill-advised neo-liberal orthodoxy and a much reduced base of taxation by which to deliver vital services.

The resolution also quite correctly calls out the aggressive tax planning, tax avoidance and artificial profit shifting practices adopted by numerous multinational corporations. As a clear call in this resolution for all countries to ensure fair taxation of global corporate profits and specifically to further support and promote the inclusive framework on base erosion and profit shifting.

Now with the new Biden administration in power there appears a real prospect of agreement on both of these pillars. This would be welcome news, but there's still much more to be done. If a global minimum tax is agreed it should allow the focus of economic policy to shift from a narrow framework of tax competition to broader factors like quality of work force, investment in education, transport and housing.

According to some estimates close to 40% of multinationals' profits are shifted to tax havens with European countries being the most affected. An overall figure of 427 billion has given us an estimate of the total taxes lost to countries each year through tax abuse and evasion.

Surely, Mister President, this is the greatest fiscal injustice of all.

Thank you.

Mr Kimmo KILJUNEN

Finland, SOC, President of the Assembly

15:33:05

Thank you very much for the statement. As you can see, the face has changed here on the podium in terms of who is guiding and leading the discussion.

Thanks to Mr Rik DAEMS, our president, for elegantly guiding the discussion at the beginning. I also want to thank very much Mr Ángel Gurría, the Secretary General of the OECD, for his presentation. It was very, very interesting to follow.

Today has also been a day where some of us have apologised for their behaviour. On the whole, I am one of those and I apologise a little bit because I have noted that somebody has criticised (which is true) that I cannot very well use this mask. I do have a personal reason, health reasons for that one, in my parliament I'm the exception, I can use this this plastic cover because I actually need to breathe in the meantime. So I'll try anyhow to do it properly here as I am chairing the meeting in the best way I can. I hope for your understanding on this matter, if that's the case.

Now let's move to the speaker's list.

The next speaker is from San Marino, Mr Gerardo GIOVAGNOLI, who is representing the Socialist group. Three minutes is the rule now.

Mr Gerardo GIOVAGNOLI

San Marino, SOC, Spokesperson for the group

15:34:28

Thank you, President.

Thank you to the Secretary General, Mr Angel GURRÍA.

On behalf of the Socialist, Democrat and Green Group I support the conclusions and proposals contained in the report prepared by Mr Georgios KATROUGKALOS and the conclusions of the rapporteur Ms Selin SAYEK BÖKE for the Social Affairs Committee.

The issue of fiscal injustice, in particular in relation to the digital economy, is very important at the moment. A great challenge indeed, strengthened by the disastrous consequences of the COVID-19 pandemic. However, prior to the pandemic, a reform of national taxation systems was necessary in order to deal with the emerging situation. Digital giants, a globalised economy and numerous different possibilities for tax evasion and avoidance. For this reason, a new fiscal planning is absolutely imperative.

Traditional tax liabilities based on concepts such as "permanent establishment" are largely outdated in the digital economy, where most value is created through virtual and stateless platforms. This is why the joint work of the OECD and other agencies, such as the Council of Europe -which is among the most active-, is of paramount importance.

The challenge is to create a multilaterally agreed tax framework for the digital economy, as proposed by the OECD, and internationally coordinated policy responses. The challenge is particularly complicated, not least because many administrations around the world see an opportunity in unfair tax competition, offering tax havens for their own national purposes. But this undermines the international community as a whole.

The argument of tax fairness is not secondary, especially in Europe, where a lower corporate income tax base has been associated with higher taxes especially on labour income and consumption. Governments have sought to compensate the losses they have had during the crisis. In fact, during 2019, tax revenues fell across the OECD for the first time in a decade. On the other hand, the profits of digital multinationals reached historic records, especially in 2020, at the height of the COVID-19 crisis.

This is clearly, now more than ever, intolerable, because this leads to the reducción of rights and services to people. It is a good idea, then, to grasp a shared need for change and to work at the multilateral level to redress these divergences, these inequalities. Not only because they produce new poverty and discrimination, but also because these inequalities set back the recovery after the multiple crises of recent years.

The innovative framework proposed by the OECD and supported by the report foresees two intelligent pillars: the first one is a unified approach together with a new tax law and the second one foresees a minimum tax rate.

Such a scheme is certainly ambitious, but undoubtedly this must be the attitude of those who think with farsightedness about the solution to a problem, such as digital tax avoidance, which a few decades ago was not even conceivable.

It is the right time, in conclusion, to intervene and to support this effort that only organizations that have a global and not a national perspective can put in place. Let us therefore join forces with the OECD and the Council of Europe to make our societies fairer and more prosperous.

Thank you.

Mr Kimmo KILJUNEN

Finland, SOC, President of the Assembly

15:39:37

Thank you very much Mr Gerardo GIOVAGNOLI.

The next speaker is Ms Maria-Gabriela HORGA for the Group of the European People's Party.

Ms Maria-Gabriela HORGA

Romania, EPP/CD, Spokesperson for the group

15:39:45

Thank you Mr President.

Many thanks to Secretary General Angel Gurría for his speech.

Dear colleagues, I will start by thanking also the rapporteur in the name of the Group of the European People's Party for his thorough work and keen interest in the work of the OECD on the taxation of digital economy.

There is also a need to urgently address the fiscal challenges posed by the digitalisation of the economy in order to ensure that all operators pays taxes fairly, especially taking into account the accelerating rhythm of digitalisation during the Covid-19 crisis and the rise of tech giants and multinational companies with a digital presence.

At the same time we need to reach a global consensus. Members of the Council of Europe need a firm commitment to a global solution to international digital taxation and to making every effort to reach a consensual solution within the OECD.

As we all know, it is confirmed that the European Union is ready to move forward if the prospect of a global solution does not materialise. In the first half of 2021 the Commission will present, for a broader tax base and for additional resources, a proposal for a digital tax with a view to introducing it by 1 January 2023 at the latest.

A global solution is preferred. That means the challenges of digitalisation and also all member states of the Council of Europe should express support for the OECD's ongoing works on Pillar 1 and Pillar 2 in order to address all remaining issues towards reaching an agreement.

Regarding the future of the Commission's proposal for a digital levy from a taxation perspective, the project will be open to be discussed once the main elements are determined. I consider that the initiative should be designed in a way that is compatible with the international agreement to be reached in the OECD framework, as well as the broader international obligations.

From a budgetary perspective we would expect new research based both on fair taxation and on a possible digital levy. We need an inclusive, just and fair international taxation, especially in the current difficult context when national budgets are overburdened, mainly due to the crisis support measures. Public financing needs are greater than ever now.

Thank you.

Mr Kimmo KILJUNEN

Finland, SOC, President of the Assembly

15:42:21

Thank you very much.

Next is Mr Jacques MAIRE.

Mr Jacques MAIRE

France, ALDE, Spokesperson for the group

15:42:31

Thank you, Mister President.

First of all, on behalf of the entire ALDE Group, I would like to thank our colleague Mr Giórgos KATROÚNKALOS for the quality and accuracy of his report on the OECD's work on tax justice.

In your report, you rightly show the deleterious impact of the race to the bottom on democracy and public finances. I would like to mention an unbearable example that you yourself cite with Mr Ángel GURRÍA: international corporate tax evasion represents a loss to individuals of 427 billion dollars. This astronomical amount shows us the size of the challenge.

With the COVID-19 crisis, this tax challenge has been strengthened and, indeed, made more complex by the accelerating digitisation of the economy. In this respect, I would like to congratulate Mr Ángel GURRÍA on the excellent work he has done to make progress on this issue and, as you recently reiterated, dear Secretary General, for strengthening the OECD's action on climate issues.

You are proposing an inclusive digital tax framework in two pillars: first, the introduction of a new tax law that would apply to companies, regardless of their physical presence in the country where they operate, and then the second, which I will dwell on a little more, which sets a minimum tax rate designed to limit the practice of corporate tax evasion.

As Mr Bruno Le Maire, the French Minister for the Economy, recently pointed out, it seems that an historic agreement is within reach and, in the ALDE Group, we are obviously hoping and praying for this rapid, global agreement, which will take into account all the digital companies that have taken advantage of the health crisis, a crisis that we are going through, and which have taken advantage of it to consolidate their market share. This proposal has come back with a vengeance with the announcement by the Biden-Harris Administration of their intention to establish a minimum tax rate of 21% for companies throughout the world, to combat the dumping effects of low-tax countries.

The approach proposed by the United States is somewhat different from that of the OECD. But, on behalf of the ALDE Group, I welcome this step forward in international taxation. I also ask you, Mister Secretary-General, what are the consequences of these new American positions on the dynamics that you have been able to develop within the OECD?

In conclusion, the OECD's inclusive framework of 137 countries seems to us to be the right framework for achieving this global minimum tax threshold. Obviously, we must avoid actions decided independently country by country, this social and fiscal dumping which continues to disrupt the world economy.

For all these reasons, the ALDE Group supports the rapporteur's excellent recommendations.

Thank you very much.

Mr Kimmo KILJUNEN

Finland, SOC, President of the Assembly

15:45:26

Thank you very much.

Now we move to the last speaker on behalf of the political groups.

Mr Dmytro NATALUKHA from Ukraine for the European Conservatives Group.

Mr Dmytro NATALUKHA

Ukraine, EC/DA, Spokesperson for the group

15:45:40

Thank you very much Mr President, dear colleagues.

Today around 4 billion people are internet users with 80% of the European population using internet daily.

Time spent online amounts now to six hours a day in the digital environment for an average citizen of Europe. Hence, it's no surprise the top seven of global market capitalisation leaders are technology companies: the founding fathers of the digital economy.

The statement made in the report that the digital economy is booming is absolutely correct as much as it is a notion that most value nowadays is created through virtual and stateless platforms.

The question is however HOW such value is created and HOW MUCH of such value is converted to taxes, being in the rapporteur's words a fundamental anchor for democracy.

Since 2020 digital transformation is accelerating as too so many people working from home. New technologies made possible such distant work. In a lot of ways they really make our lives better. In other ways they are making our lives different, transforming the very fabric that lies at the core of the modern economy: capitalism.

With so little left that could be commodified, the last virgin territory was private human experience. The digital economy made this last capture, giving birth to the so-called surveillance capitalism. According to Professor Zuboff, it is a unilateral claiming of private human experience as free raw material for translation into behavioural data which is then computed and packaged as prediction products and sold to behavioural futures markets, specifically those virtual and stateless platforms with a commercial interest in knowing what we'll do now, soon and later. This complements the answer to the question on how tech giants are creating value through such platforms regardless of their retail sales.

Now, this economic logic however has now spread beyond tech, to new surveillance-based ecosystems in virtually every economic sector, from insurance, health, education, finance, to every product described as smart. The smart digital economy allows us to listen to music we like, find food we crave for, navigate to places we love, communicate with colleagues and friends and enjoy a myriad of other benefits.

If you only look at the GDP numbers, however, you'd think that the digital revolution never happened. The digital sector is contributing surprisingly poorly, ranging from 4% to 6% annually. It seems that we see the digital age everywhere except in the GDP statistics. One answer to that is that GDP captures only monetary value of all final products produced in an economy. Another is because an economy traditionally considers the goods produced by permanently established entities, reverting us exactly to the issue raised by the rapporteur in his report. For this reason we consider this report to be absolutely timely and endorse it, as it provides part of the solution on how to close the loopholes in the concept of permanent establishment which makes all countries especially vulnerable to tax base erosion.

Future tax innovations should be focused on equitable sharing of big tech companies' income tax among customer countries. At the same time we hope that developing countries will be provided with efficient tools to challenge transfer pricing and added value allocation to more developed countries.

Thank you very much, I would like to support the report.

Mr Kimmo KILJUNEN

Finland, SOC, President of the Assembly

15:48:59

Thanks very much for your presentation and now we move to the, let's say, more normal list of speakers.

The first one is Ms Petra BAYR from Austria.

Please, the floor is yours.

Ms Petra BAYR

Austria, SOC

15:49:12

Thank you very much, Mr Kimmo KILJUNEN.

The ability to collect a state tax for the financing of public services and services of general interest – to collect it without gaps – is an important democratic function of a state. It is also a practical redistribution.

Many multinationals in the digital economy earn billions in Europe, but they hardly pay any taxes.

For years, Apple has shifted profits from all over Europe to Ireland via subsidiaries, and in some cases paid only 0.005 percent in taxes there. That's 50 euros in taxes on 1,000,000 euros in profits. Amazon is a master in global tax tricks and on top of that Amazon exploits employees, weakens unions, destroys local trade and with it local jobs and monitors consumers.

If corporations earn their money with tax tricks, then they must not get any tax gifts, nowhere in Europe, nowhere in the world, and they must not get any public investments.

In an Austrian distribution centre of Amazon with 150 employees, only 16 were directly employed by Amazon, the rest were temporary workers, and they had a much harder time organising, demanding their labour rights and enforcing their right. This was despite the fact that they suffered inhumane treatment, constant surveillance and degrading regulations.

Corporations have a duty to pay taxes so that countries, so that states, can fulfil their duty, on the one hand, to pay for services, public services for people, but also to finance multilateral organisations, such as UN organisations, where there is an increasing lack of money – with the effect that these UN organisations, such as the WHO, are increasingly dependent on money from private donors, who in turn, with their private money, which they have evaded, where they have not paid taxes for it, then also very clearly determine the policy of this organisation. It should be the states that determine the policies of multilateral organisations on the basis of the needs of their populations and of the people they are supposed to serve, not multilateral corporations that dictate them.

In that sense, I very much welcome this report. I think it is a very important step in the right direction.

Mr Kimmo KILJUNEN

Finland, SOC, President of the Assembly

15:51:58

Thank you very much Ms Petra Bayr, you are representing the socialist side in Australian politics.

And the next speaker is representing the other side in Austrian politics and Mr Eduard KÖCK, representing the EPP group.

So the floor is yours and I suppose you are actually having the distance with your connections to us, as if I understand it correctly.

So Mr Eduard KÖCK, you should request the floor, please. We tried to offer it to you now.

Mr Eduard KÖCK, we should balance Petra's position from the socialist side.

Hopefully we are successful.

Mr Eduard KÖCK

Austria, EPP/CD

15:52:50

Dear Mr. President,

Thank you, Mr Secretary General, for the initiative.

Thank you, rapporteur, for the important report in this direction,

We have already heard a lot of figures, a lot of big figures. We can always read about how much Mr Jeff Bezos should pay, that Airbnb is the biggest hotelier without owning a single bed, what business Alibaba is doing all over the world and we do not know whether VAT is being paid or how much is being paid at all. And we see that huge amounts are being stored in tax havens. We have already heard that even European countries are giving in to this. On the other hand, we have small and medium-sized enterprises, which, in the case of tax audits, are then served with heavy penalties for offences of a few thousand euros. Here, of course, justice must be done, because there is no understanding whatsoever of this, especially among these enterprises and, of course, among society as a whole.

But Europe must also be careful here not to become an economic colonial state of the US and China, I think here we really need unity to oppose this. The first approach was already made a few years ago by of the European Union, which then lost its way and so Austria introduced a digital tax in 2020 alone, as one of the first countries ever and as one of the only ones that now has a digital tax, which is perhaps not necessarily the best. But if there is a better international solution, then I think Austria will join it very gladly. It is important to take a united stand here, because these corporations have already achieved a position of power that enables them to take entire countries hostage and then, ultimately, to use this power to push their interests through.

I would also like to bring to light a situation that came to our attention, I think, in the Suez Canal situation. The situation of the shipping companies was looked at more closely and there, there is also flag flight. That is to say, they choose cheap tax countries under whose flag they then undertake these transports, precisely in order to reduce taxes. Also, there are often no regulations at all for the workforce, the employees are being exploited too. I think that this shipping should either be looked at as well or perhaps discussed again in a separate report in the future, because there is also a great deal of tax evasion which should be stopped.

Thank you for the initiative, it is very, very important. It is one of the most important initiatives in the future because  more and more business will emerge in the digital area.

Thank you.

Mr Kimmo KILJUNEN

Finland, SOC, President of the Assembly

15:56:00

Danke schoen!

Next we are moving to Turkey with Ms Emine Nur GÜNAY.

Please, the floor is yours. And you are, I assume, via net.

Please.

Ms Emine Nur GÜNAY

Turkey, NR

15:56:16

Dear President,

Dear colleagues,

Dear Secretary General of the OECD,

I would like to thank the rapporteur for his report on digital taxation, an issue which affects all member states significantly. I do support the assessments of the report on the need for a fair taxation of digital economy. Undoubtedly, we are under extraordinary economic and social circumstances triggered by the COVID-19 pandemic. In addition to the economic crisis in the last decade, the pandemic has also urged many countries and their tax authorities to seek new sources of income. However, there are many challenges awaiting countries on account of negative effects arising by the expansion of the digital economy recently.

Some multinational companies seek to transfer their profits to countries or regions with low or no taxation through corporate structures and tax practices, which they have created around the world by taking advantage of the differences in local legislation and agreements in the countries, such as on the avoidance of double taxation. While some multinational companies can reduce their tax burden with aggressive tax planning, financial authorities tend to increase the rates and amounts of taxes collected from local taxpayers or introduce new taxes in order to compensate their losses. Therefore, effective tax burdens on small and medium-sized local taxpayers are increasing. As a result, injustice in the distribution of tax burdens among taxpayers and tax revenues worldwide are increasing. Additionally, there has been growing discontent among the public in recent years vis-à-vis the low effective tax rates of multinational companies and the tax practices of some well-known companies in particular. These practices are adversely affecting financial administrations and, ultimately, the welfare of the people.

Dear colleagues, the COVID-19 crisis illustrates our collective vulnerability and highlights the importance of multilateralism. It is important to solve the problems caused by the digital economy through multilateral dialogue and consensus rather than bilateral actions. Cooperation in this area is indispensable to avoid tax disputes that could impede the recovery from COVID-19 by triggering trade wars among countries. In this respect, we appreciate the work of the OECD on the BEPS and hope that a multilateral consensus on digital taxation could be reached soon.

Thank you for your attention.

Mr Kimmo KILJUNEN

Finland, SOC, President of the Assembly

15:59:23

Thank you very much.

The next speaker is from Ireland: Mr Dara CALLEARY.

Mr Dara CALLEARY

Ireland, ALDE

15:59:41

Thank you Mr Secretary General for your contribution as you prepare to move to your next phase. It's not retirement. I never use that phrase.

Mr Secretary General, you committed to building a fairer and more transparent globalisation. That is an important aim. It is a shared aim. It will be difficult. I think that while we go on this road we must ensure, while you go on that road, that you protect all our countries and smaller economies in that process too.

As we examine digital taxation we must also examine how the digital framework has transformed and changed the landscape for many companies and has made it much more difficult for smaller companies and smaller enterprises to operate against the monolith of big digital companies.

We must design a taxation system that supports our smaller enterprises, that supports smaller economies. In doing so in the context of our digital attacks, by supporting smaller enterprises and smaller economies, we also assist in our climate change challenge, and we assist in that particular effort too.

Finally, Mr Secretary General and Mr Chairman, the digital economy has transformed many of the tools that we as an institution have to promote the key ideas of the Council of Europe, of the OECD, and of other multilateral organisations.

We must see how we can use digital taxation to support free media, to support independent voices, and to support voices and coverage that highlight and support many of the strategic aims of this organisation which otherwise may not be highlighted in the context of big digital companies.

I wish you well in the remaining part of your term, Mr Secretary General. You have set yourself an ambitious target to have an agreement by mid-year. I know that this institution would be happy to work with you in achieving that.

Thank you.

Mr Kimmo KILJUNEN

Finland, SOC, President of the Assembly

16:01:57

Thank you very much indeed.

Now we move from Ireland to its eastern neighbour country, the United Kingdom.

Mr John HOWELL please.

Mr John HOWELL

United Kingdom, EC/DA

16:02:16

Mr President,

I think if you listen to the earlier contributions to this debate you could have been forgiven for thinking that the rise of digital companies is entirely due to the pandemic. Of course it is not. It may have been enhanced by the pandemic, but it is not due to the rise of these companies during the pandemic.

Clearly the other thing that I think, that it is important to stress this point, is that these companies produce products, produce services, that people like, that are of benefit to people and that we need to recall at all times the views of the users in being able to do this.

But I do accept that there is a need to level-up between the digital and the non-digital companies. If you look at the application of current tax rates to businesses then there is something of a maladjustment that has taken place between where profits are based and where value is created. I think that that is something that does need to be addressed. To be honest I can think of no one better than the OECD to be able to do that and to share that sort of report across many countries.

The other thing that I think the OECD should concentrate on is one of education, of helping students to learn about the digital economy and the role that it plays in our society today. I think that that is a very important role that the OECD can play and it is one that if we are looking to build on the future, then it is one that we need to spend a lot of time on.

Just to comment on the the concept of fairer taxation, a fairer taxation system, I think one of the things that one has to bear in mind here is not just the corporations, it is just not about the business tax, it is also about the tax that we charge to individuals. To bring that tax down is as fair a way of ensuring that we can make the tax system fair for people as anything else that we can do. I really do support that and I've seen how that works. As the OECD said the digital economy is fast becoming synonymous to the economy as a whole and that is why these sort of activities are so important.

Mr Kimmo KILJUNEN

Finland, SOC, President of the Assembly

16:05:24

Thank you very much indeed.

As our president Mr Rik DAEMS introduced this topic in this debate, we also have delegations from parliaments of non-European member States of the OECD, and I am also welcoming the participation of our colleagues from Canada and Mexico.

And the next one now, we move to this business and the next one is from Canada, Mr Don DAVIES, please.

We are moving cross-Atlantic.

Mr Don DAVIES

Canada

16:06:00

Dear Fellow Parliamentarians,

I have a few remarks on the taxation of the digital economy.

This is truly a fiscal injustice that has plagued global public finances for far too long.

As the Committee on Political Affairs and Democracy rightly points out in its report: “Taxation, when fair and redistributive, is both an essential tool for governments to raise the funds necessary for the proper functioning of public services and a fundamental anchor for democracy.”

But the current international tax system is far from being fair and redistributive, especially regarding digital multinationals. These multinationals benefit enormously from the current outdated international tax rules that many countries have put in place almost a century ago to avoid the double taxation of a corporation’s profits by two different countries. These rules allow a country to tax a foreign corporation only when it has a permanent establishment or a physical presence within its borders. Yet digital multinationals do not need a physical presence in a country to sell billions of dollars of goods and services to its residents through the Internet.

It is therefore far too easy for digital multinationals to take advantage of the current international tax rules by artificially transferring their profits generated in a country into other countries with lower tax rates or, worse still, tax havens. Furthermore, this creates an unlevel playing field for local businesses that must pay taxes in the country in which they have a physical presence, while also competing with digital multinationals.

This situation has also contributed to an unhealthy race to the bottom among countries for increasingly lower corporate tax rates. For example, the average statutory corporate tax rate of OECD countries has fallen by more than 8.5 percentage points from 32.2% in 2000 to 23.7% in 2018. As a result, many governments, including Canada’s, are experiencing growing tax revenue losses due to the rapid digitization of the economy. These revenue losses are preventing governments from providing their residents with the public services they need.

Over the past year, governments have spent hundreds of billions of dollars to support their residents in the face of the devastating effects of the COVID-19 pandemic. While thousands of businesses were forced to close and unemployed workers were receiving government assistance to make ends meet, digital multinationals were making record profits without paying their fair share of taxes.

In Canada and around the world, individuals and businesses are becoming increasingly aware of this fiscal injustice that is mostly benefiting digital multinationals and tax havens at the expense of everyone else. Thankfully, we know the issue and potential solutions; we only need now the political will and coordinated actions to address this fiscal injustice in 2021.

Thank you, Colleagues.

Mr Kimmo KILJUNEN

Finland, SOC, President of the Assembly

16:09:21

Thanks very much Mr Don DAVIES, and now we are moving back to the United Kingdom, Mr Tony LLOYD.

Mr Tony LLOYD

United Kingdom, SOC

16:09:36

And can I begin by thanking very strongly Mr Georgios KATROUGKALOS for his excellent report and also in a very non-formulaic, a very real way, my appreciation of the work over many years, of Angel GURRÍA, the Secretary-General of the OECD.

It is important we do record that Mr GURRÍA, not simply to be formulaic, but because I hope that the culture that you have established at the OECD will continue into the future because that is what you have established but that is what is so important for this debate. Because this issue of corporate domination is not a new one. We see in Europe, just these last days, the decision of the large football clubs to operate on the basis of corporate greed against the interests of the consumer: the football fan, etc. Nor is there anything new in this, we know that the use, going back over many years, of transfer payments, of offshoring headquarters of companies, allowed those companies – the multinationals – to avoid taxation, even in the the so-called developed world, but also gave them great power vis-à-vis weaker countries so that international corporations were stronger than the smaller states. But actually the situation we have today is that unless we do make the kind of changes we're talking about today, the large digital international operators can bully and can effectively bully whole nations and indeed whole regions, so we have to act together if we are going to make any kind of difference on this.

I am grateful to the report for making the point that we have lost some €427 billion of tax revenues. This is enormous and if we look at the challenges – the real challenges – of the world today, the challenge of Covid, the challenge of climate change, we know that we can only achieve what we need around this world if there is a global response to both of these. And that will require not simplifying national taxation, it requires a fair system of taxation on a global basis so that we can operate the kind of transfer payments that can make sure that we do not exclude the developing world from the benefits of those changes but, actually, benefits that we need as well.

So we have got to make these moves but I would conclude, and I would be interested in if the Secretary-General could comment on this in his final remarks, and there are real difficulties because actually balancing national taxation with taxation of international operators is quite a difficult one; sales tax can help, and transfer payments still help the multinationals, particularly the digital multinationals. Yes, let us move in the right direction, but we have got to have international agreements and I very much welcome both this report and the work of the OECD because it is moving this world of ours on in the right direction.

Mr Kimmo KILJUNEN

Finland, SOC, President of the Assembly

16:12:47

Thanks Mr Tony LLOYD.

The next speaker is Mr Ziya ALTUNYALDIZ from Turkey.

Mr Ziya ALTUNYALDIZ

Turkey, NR

16:13:04

Thank you Mr Chair.

Dear President, dear colleagues and dear Secretary General of the OECD,

First of all, I would like to thank the rapporteur for his considerable effort in preparing this report which is a valuable contribution to the debate on the taxation of digital economy and the international efforts on the issue, particularly by the OECD.

I'd also like to thank Mr Ángel Gurría for his 15 years of devoted service as the Secretary General of the OECD and his well-prepared presentation. I wish all the success to Mr Mathias Cormann in the handover as the new Secretary General.

Dear colleagues, the digital economy has shown a significant development especially in the last decade and has reached serious economic proportions. Studies show that the digital economy is worth 11.5 trillion US dollars globally. It's equivalent to almost 16% of global GDP. It has grown two and a half times faster than global GDP over the past 16 years, almost doubling in size since the year 2000.

As a result of this rapid development, the digitalisation of trade has also resulted in a significant increase in the income of companies. At first glance, although the growth of the digital economy is expected to create an advantage in terms of tax revenue, problems have arisen in taxation due to the fact that the digital economy does not operate within physical borders, as some colleagues have said.

On the other hand, countries have limited instruments as well as a lack of legal regulations and know-how regarding the taxation of the digital economy. Consequently, collected taxes from the digital economy remain limited, far less than what was foreseen. 

Moreover my dear friends, new technologies have facilitated tax avoidance through the shifting of profits by multinational enterprises to low or no tax jurisdictions. Old laws can no longer ensure the fair distribution on tax bases and equitable taxation which negatively affects all financial administrations and taxpayers.

There are countries, including Turkey, that have legislated new rules in this field. But I believe that multilateral rules in accordance with changing conditions should be determined as a result of this breakthrough transformation.

Let me sum up. It is important for all countries to obtain a fair taxation environment, such that preventing multinational companies from paying less tax than others in this context. I thank you all.

Mr Kimmo KILJUNEN

Finland, SOC, President of the Assembly

16:16:42

Thank you very much.

I'm so sorry because the list is quite long, and I'm afraid maybe we cannot reach the end.

Please try to keep the three-minute limits, because you are clearly stealing other speakers' time.

Now, the next one is from Switzerland.

Mr Damien COTTIER, please.

Mr Damien COTTIER

Switzerland, ALDE

16:17:00

Thank you, Mister President.

The objective of ensuring the financing of states through taxation and of ensuring the contribution of all economic actors, in particular all types of companies, including in the digital field, to this collective effort is obviously a laudable objective.

However, over and above what we have heard today about the importance of this contribution, the importance of the fight against fraud and the size of the amounts involved, which are clearly shown in the report, I would also like to point out some risks. For although the objective is laudable, sometimes, in politics, the paths leading to the solution may vary and some paths may contain a few obstacles. So, we must proceed with some caution.

Tax competitiveness, which is not an end in itself, is a good way of assuring taxpayers and companies that the state will not ask them to contribute more and more to the detriment of their own individual interests, when the rate of taxation exceeds certain thresholds, and to the detriment of the collective interest, which is linked to consumption, investment, job creation by companies, and their involvement in research and innovation.

In this respect, the setting of minimum tax rates, as is currently being discussed within the OECD, must be treated with some caution. For the natural tendency of states and public administrations is to grow and therefore to demand more resources. Faced with this, tax competition is a means and, from a liberal perspective, an effective lever to protect individuals and companies from a tax system that would tend to become ever more burdensome. The aim of making those who currently evade their duties or do not fulfil them sufficiently contribute, which is a laudable aim, must not lead us to increase taxation for all by setting up rigid mechanisms, as this would be detrimental to competitiveness and employment. Basically, the "race to the bottom" that some have described here must not be replaced by a "race to the top". It is a balance that we must seek.

If minimum rates are set under the second pillar of the OECD's work, we must therefore ensure that they are set with sufficient moderation so as not to cause an overall increase in corporate taxation. The circle of companies covered by the first pillar should not be defined too broadly in terms of the turnover threshold.

Finally, we must avoid increasing the administrative burden for companies and tax authorities by creating mechanisms that are too complex and therefore too costly. This is in the general interest, to preserve jobs, investment and innovation, for the benefit of all.

Mr Kimmo KILJUNEN

Finland, SOC, President of the Assembly

16:20:06

Thank you very much indeed.

It's my pleasure to introduce another colleague from the parliament of Canada, Mr Scott Simms please, the floor is yours.

No connection?

Ok. Sorry, my good introduction was in vain.

The next one is from Hungary, Mr Barna Pál ZSIGMOND.

Mr Barna Pál ZSIGMOND

Hungary, EC/DA

16:20:36

Thank you Mr Chairman,

First of all, I would like to congratulate the rapporteur for this excellent report and I would like to thank the Secretary General for his remarks. 

In relation to ensure fair taxation of global corporate profits, Hungary as an OECD member country, is committed to supporting the Inclusive Framework on further elements of the Base Erosion and Profit Shifting (BEPS) project being implemented. Hungary has signed and recently ratified the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS. Furthermore, Hungary introduced a highly developed framework of tax information exchange as a result of the work of the OECD and the development of the European Union’s Directive on Administrative Cooperation, with the aim of ensuring tax fairness and transparency, and stepping up against aggressive or abusive transactions.

Hungary fully agrees that action has to be taken at all levels (national and international) to fight against tax evasion and aggressive tax planning. We agree that measures shall be proportionate to this aim and should not go beyond. We also give great importance to the intention highlighted in the document to take account of the needs and interests of small or developing countries in the design of a new post-BEPS international tax environment, while respecting their sovereignty to shape their tax system, in order to keep investments to be able to maintain the governments’ legitimate financing abilities.

International partnership is especially important nowadays, when we all face extreme pressure because of the Covid-19 pandemic. In this regard, Hungary welcomes the efforts made by the Rapporteur for Opinion and the Committee on Social Affairs, Health and Sustainable Development on the priority recommendations with regards to the targeted and timely actions that governments may impose in order to mitigate the economic effects of the pandemic. We support working in cooperation on finding the appropriate measures and sharing best practices to help a fast recovery.

Regarding the taxation of the digital economy, Hungary welcomes the commitment of the G20 to reach political consensus in July 2021, on the work done by the OECD. In our view the formulation of a new system to tax multinational enterprises active in the digital economy, with the aim of creating a fair tax environment, cannot be deferred further.

On the other hand, we all have to concentrate on the finalisation of the technical work in the OECD on both pillars, keeping in mind the compatibility of the rules with European Union legislation. Importance shall be given to an outcome which equally meets the needs of all countries and jurisdictions, small and large, developed and developing.

Regarding pillar one, we would like to recall, that in the last decade the economic reality changed significantly due to digitalisation and current international tax rules and we need solutions, which are fit for the future. For this reason, we support the work on pillar one. 

With regards to pillar two, we recognise that numerous sophisticated business models provided extensive opportunities for multinationals to avoid taxation and we fully agree with the attempts to step up efforts to prevent tax avoidance. 

Thank you for your attention.

Mr Kimmo KILJUNEN

Finland, SOC, President of the Assembly

16:23:46

Thank you very much. And now we move to Georgia with Ms Mariam KVRIVISHVILI.

Please.

Ms Mariam KVRIVISHVILI

Georgia, SOC

16:23:54

Thank you.

First of all, I would like to use this opportunity to express our sincere gratitude and appreciation towards the OECD Secretary General for his immense contribution throughout this time.

In recent years the Government of Georgia has been putting special efforts in shaping international tax system in line with new standards adopting by the OECD.

In 2016 Georgia was among the first countries to become an associate member of the inclusive framework on base erosion and profit shifting and took the responsibility for the implementation of BEPS package to tackle tax avoidance, improve existing international tax rules, and ensure a more transparent tax environment.

To date, Georgia has successfully implemented BEPS minimum standards.

In 2017 together with 17 ministers and other high-level representatives, Georgia signed the multilateral convention to implement tax-treaty related measures to prevent base erosion and profit shifting. The convention entered into force for Georgia in 2019, it is of most importance to highlight that in 2020 Georgia was elected as a chair of the conference of MLI for 3 years.

In addition to the above mentioned, Georgia implemented the transparency framework for spontaneous exchange of information on certain tax ruling. The country has signed the multilateral component authority agreement on the exchange of country-by-country reports and put it in place legal framework for implementation of the CBC reporting standard.

In line with creating stable business environment, immense state efforts and incentives, Georgia continues working on the implementation process of the BEPS standard to build a fairer tax system aiming to further advance its efficiency.

Georgia strongly supports the OECD work in relation to reaching a consensus-based agreement on pillar 1 and pillar 2 within predetermined timelines.

From 2016 to 2020, the Court Minister of Finance of Georgia was an elected member of the steering group of the OECD group G20 inclusive framework on BEPS. Under his direct supervision Georgia was intensely involved in the work tackling the tax challenges related to digitalisation.

Georgia remains committed to further advance taxation of the digital economy. We strongly believe that, as a developing country, in light of the ongoing economic crisis caused by the pandemic, the country will benefit from the results of this work facilitating sustainable long-term economic growth.

Thank you.

Mr Kimmo KILJUNEN

Finland, SOC, President of the Assembly

16:26:37

Thank you very much. We move to Cyprus. Mr George LOUCAIDES.

Mr George LOUCAIDES

Cyprus, UEL

16:26:48

Good afternoon from Cyprus Mr Chairperson.

I would first like to congratulate the rapporteur Mr Georgios KATROUGKALOS for his really excellent work. The established closer and more productive relationship between the Assembly and the OECD is a proven valuable framework for cooperation, and feedback on pressing challenges, such as the ones reviewed in this report.

The fiscal power of the government predicates its democratic legitimacy. The appropriate transferring of tax revenue into spending is vital for the provision of social welfare programmes in the key sectors of employment, health, housing, education and culture, which makes the backbone of a prosperous, fair and inclusive society. Since the outbreak of the Covid-19 pandemic, dear colleagues a year ago, social assistance programmes, subsidies and other benefits have proved crucial, as governments around the world have been struggling to revive their halted economies due to the Covid-19 crisis.

The pertinent policy framework aimed at making taxation simpler and fairer is continually relevant in fighting all forms of social injustice and inequity and falls primarily under the competence of national governments. Moreover, promoting tax justice and fairness and combatting tax fraud, evasion and avoidance in today’s interconnected digital world, is a common challenge that transcends national policy and requires synergies, on the regional and international levels.

Today, especially with the impact of the ongoing pandemic, an ever-growing digital economy is vested in all sectors, especially of finance, logistics, advertising, trade and retail. In addition, digital value creation does not predispose physical presence, and therefore requires an internationally coordinated effort in addressing the various challenges surrounding the taxation of digital economy, especially, when taking the massive wealth generated by Big Tech companies into account.

The leading role of the OECD in the efforts to harness the boosted power of digital economy has been instrumental, not only in regards to the general dialogue on tax policy reform, but also in the efforts to address specific issues, such as that of base erosion and profit shifting (BEFS). National strategies promoting sustainable development and growth and enhancing progressive and just social policies should be revered, not sacrificed on the altar of economic globalisation.

Thank you.

Mr Kimmo KILJUNEN

Finland, SOC, President of the Assembly

16:29:41

Thank you very much.

Mr Ángel Gurría, you are following the discussion from your office in Paris, aren't you?

Now my question to you is that I see that you might be in a hurry.

Do you want to react now to the discussion or should we still continue with the debate a bit further?

Mr Angel GURRIA

Secretary General of the OECD

16:29:59

I'd rather react to the discussion now, Mister Chairman.

You know, I thank: Paul, Gerardo, Gabriela, Jacques, and also Dmytr, Petra, Eduard, Emine, and also Dara, John HOWELL, and also Don DAVIES, Tony LLOYD, and Ziya. By the way, Ziya also plays a very important role with artificial intelligence with us. Mr Damien COTTIER, then Barna Pál ZSIGMOND, Mariam from Georgia, and now George from Cyprus.

Let me say thank you to all of them and to say, "Today because of the work of the OECD there is nowhere to hide!". I said that 107 billion have already been received, but I said also that there are 10 trillion that have been uncovered, that have been discovered in those accounts, those 84 million financial account. So again, there's nowhere to hide in terms of tax transparency. But the other question is, of course, the BETS, the base erosion and profit shifting. All the questions in which countries try, or companies try, as was mentioned by many of you, the companies try to avoid paying taxes or they go to these tax havens.

We are finishing with the tax havens, we are changing about 350 harmful tax regimes, and we have nullified the part that it was harmful. We have also changed the part that was harmful so that it is no longer harmful to the next country, so that it does not do any harm to the neighbor. So we were working on all this.

The tax rulings that were mentioned, the tax rulings, you know, all these this mystery surrounding the tax rulings. Now 36,000 tax rulings have been made public.

Now, let me go into the most newsworthy, the one that is more, let's say, politically sexy. It's also quite important from the point of view of political justice and also of politics. Why? Because how does the man in the street react to the fact that he has to pay 25, 28, or 30, or 35 per cent taxes, when the richest man in his country is not paying taxes because he's off to a tax haven? Or how does the small and medium enterprise react to the fact that they're not paying taxes because they have to pay taxes because they're there, their borders keep them prisoners, but at the same time the biggest companies in the world go to different places where they use the very relaxed rules and pay no taxes or pay very little taxes?

That is finishing. I believe that by July we will be able to have a deal and with... somebody asked how has the position of the United States changed the game. It is a very big game changer! Because by having turned around and said "yes, let's do it multilaterally" and now the Europeans what they're saying is "yes, let's do it multilaterally! Let's avoid the need to go national." Which they were going to because the U.S. were blocking the actual agreement on the multilateral side.

Now what we have is 139 countries that are ready and willing to move forward, including the United States, including the Europeans, each on their own. A total of 139 countries on equal footing saying: let's have a deal, let's have an agreement, a multilateral agreement, an international agreement.

This, dear friends, ladies and gentlemen, I think this is what we are going to have. I am delighted to be the one who brings these news to you and to say: help us support this in any way with your countries so that it actually happens.

Thank you all very much. It's been a pleasure, and it's been a privilege. As I said before, it's been fun!

Ms Lucie MONCION

Canada

16:35:55

Dear parliamentarians,

I would like to thank you for allowing me to participate in this important debate on the taxation of the digital economy. I'd like to congratulate the OECD Secretary General, Mr Ángel Gurría, for the excellent job he has done.

In recent years, countries around the world have had to face up to a series of challenges including the health challenges of the last 12 months. They are now obliged to put their public finances in order to deal with the challenge of Covid-19. As we have seen economies around the world suffering, digital multinational companies have made record profits, in particular thanks to the rise in online services due to social distancing measures.

The main tax injustice that the pandemic has highlighted is the fact that these digital multinationals have been making record profits without paying their fair share of taxes.

How did this happen?

Some years ago, multinational companies threatened governments about double taxation in different countries. To avoid this, several countries agreed on an international rule that only foreign companies with a permanent establishment in a country would be taxed there.

However, given the evolution of the international tax system and the emergence of digital multinationals, these companies no longer need to have a physical presence in a country to generate millions of dollars in profit. It is enough simply to have a small presence in the countries where they generate their profits before transferring that income to low or near-zero tax countries.

In recent years, the OECD has done a tremendous amount of work on its "Tax Base Erosion and Profit Shifting" (BEPS) project, including developing proposals for an international agreement on the taxation of corporate profits by 21 June 2021.

More recently a series of countries, including Canada and other European countries, have announced their intention to instigate their own tax if an agreement is not reached quickly. However, negotiations are getting a second wind as U.S. Treasury Secretary Janet Yellen announced recently that efforts would resume to try to reach an agreement on a minimum international tax rate.

We recognise the problem that digital companies often pay very little tax; it's an enormous problem. But a solution is now in sight. We must all work together to end this tax injustice in 2021.

Thank you for your attention.

Mr Kimmo KILJUNEN

Finland, SOC, President of the Assembly

16:38:50

Thank you very much.

And I am seeing next one on the list is Laura CASTEL from Spain but she doesn't seem to be in the hall, so the next one is from Mexico, Ms Dora Patricia MERCADO CASTRO.

Welcome, Mexico.

Ms Dora Patricia MERCADO CASTRO

Mexico

16:39:17

Good afternoon,

I would like to extend my warm greetings to members of the Parliamentary Assembly of the Council of Europe, dear President, I am delighted to be with you this afternoon.

In particular, I am delighted to see someone of my own country, José Angel Gurría, and I would like to thank him for the fantastic work he has been doing at this important organisation, the OECD.

In my own country, Mexico, we have seen, very sharply, the impact of the pandemic and of the lockdown on the digital economy. We have seen a massive increase in the use of digital communication and it has led to an increase in workload for many. Many people who belong to the lower social economic classes are the biggest sufferers of the so-called digital divide. In many rural areas, people find themselves particularly vulnerable. There is also a gender divide between men and women. In countries with the lowest revenue, the difference between men and women is as much as 30%.

This is why it is so important that we have a fair taxation system, in particular, for investment. The idea of such a fair policy would be to create a greater balance between digital economy companies and our efforts to increase tax election so as to improve public services and public policymaking. 

I would like to thank the OECD services for having established a consistent framework for taxation around the world, setting out a series of very clear rules and scales for companies. 

The consensus which now seems to be coming together on this issue, means that member states would be able to ring fence some of the income from this new agreement so as to focus on developing and fostering jobs of the future, many of which are provided in the sector. We fully support the provisions set out in this report, which states that coordinated action is necessary to bring an end to the undermining of essential public services which clearly has a negative impact on the well-being of our citizens.

Following the loss of jobs due to technological change, and a growing need to maintain productivity and employment, the international community has to pull together, as we heard yesterday from President Rik DAEMS, taxation of these companies is part of the solution rather than part of the problem. If we are to improve the taxation of these companies, this will enable us to offer greater opportunities for life-long education, and also to shorten excessive working hours so as to improve the work-life balance, in particular, for women. 

We are very much committed, in Mexico - as a full member of the OECD, and as an observer in the Assembly - to supporting these efforts to find rational and fair solutions, so as to ensure that the taxation of these companies does contribute to social justice. 

Mr Kimmo KILJUNEN

Finland, SOC, President of the Assembly

16:42:45

Thank you very much.

Time is not very much on our side, but I can take a few still.

Mr André VALLINI, France.

 

Mr André VALLINI

France, SOC

16:43:04

Mr President,

Ladies and gentlemen,

Taxation enables states to finance public policies and services that are essential for the exercise of fundamental rights. If states were to run out of these resources, we can imagine the difficulties they might have in carrying out their sovereign duties and the consequences that this would have on democracy and the rule of law.

The 2008 crisis and the current pandemic have contributed to the deterioration of public finances, and it is more important than ever for states to ensure that no company tries to evade taxes, which must of course be fair and equitable.

Today, the rise of free trade and the free movement of capital is accompanied by an unprecedented development of digital technology in the economy. This situation has enabled the largest companies to relocate not only their production sites but also their sales sites, which can sometimes be far from the final consumer. Similarly, the notion of "permanent establishment" on which the classic model of international tax base allocation is based is being challenged. This is particularly true for the digital giants, whose taxation does not correspond at all to the profits they make.

The OECD has taken up the issue – we have just heard a lot about this – and rightly distinguishes two aspects: a first aspect relating to the taxation of the digital economy and the distribution of taxable income between countries, and a second aspect relating to the fight against tax optimisation, with consideration being given to the establishment of a global minimum tax.

It is important that our Assembly supports this work. It was important that the Assembly supported the work of the Committee on Legal Affairs and Human Rights. It is therefore necessary to adopt coordinated measures to ensure that the digital giants do not evade the tax they must pay.

Regarding the ongoing OECD negotiations, the US had been holding them back but the new US Joe Biden administration now says it is ready and "committed to working with our trading partners to resolve their concerns about taxes on digital services and to address broader international tax issues", while reserving the option of imposing additional tariffs until then.

In the absence of progress in the negotiations, I recall that France was the first country to introduce a tax on digital services. This initiative will naturally be subject to adjustments depending on the negotiations underway within the OECD and the G20, but it has the merit of showing a way forward and marking a determination: that of adapting taxation to the new challenges and establishing greater equity.

I will therefore vote in favour of the draft resolution before us.

Thank you.

Mr Kimmo KILJUNEN

Finland, SOC, President of the Assembly

16:45:36

Thank you very much.

I am actually using my power as the chair of the meeting.

First I'll allow only two speeches more.

First from Armenia, Mr Mikayel MELKUMYAN, but I'm actually asking the favour of my neighbouring countries Estonia, Mr Raimond KALJULAID, and Russia, Mr Andrey EPISHIN, because I would actually like to give the floor to the Mexican guest whose from outside, Mr  Hector VASCONCELOS after Mr Mikayel MELKUMYAN.

Please Mr Mikayel MELKUMYAN.

Mr Mikayel MELKUMYAN

Armenia, EC/DA

16:46:10

Dear Colleagues,

First of all, I must say that the subject of our discussion is very important, but at the same time we ought to look on the bright side and try to find positive solutions.

Can we make an effective decision? I don't know if that's true. But as a professor of economics, I must set the direction and the levels of taxation. We need to observe these indicators: first of all, the level of investments in GDP, tax rates in GDP, the level of consumption in GDP and finally the level of credits in GDP.

In Armenia, the GDP taxes are 22%; the GDP investment ratio is 17%; and the credits GDP ratio is 70%; and consumption, which is very important, is 90%.

This is not normal.

And in order to make the right decision, we have to lower the level of GDP consumption and liberalise the investment programmes.

The head of our political party Mr Gagik TSARUKYAN suggests that we support small loans. This is a rational decision, but I am not trying to say that for stable countries that are bordering Turkey and Azerbaijan - these two members of the Council of Europe launched an aggressive war against Nagorno-Karabakh and Artsakh in September, October and November 2020. We had many victims of this conflict, there are many disabled, injured or missing people.

How can we deal with that situation?

My question is not addressed to Azerbaijan and Turkey. My question is addressed to the Council of Europe.

Why do you remain silent in times of war, on the sidelines? Why are you not concerned by this fascist situation? Why don't your procedures and regulations allow you to resolve this situation? If they don't permit this, you must change your system.

I met with the families of various Armenian prisoners of war. How can I go back to them, to Armenia?

Lastly, I await your decision.

Thank you.

Mr Kimmo KILJUNEN

Finland, SOC, President of the Assembly

16:49:12

Thank you. Thank you.

A little bit not on topic because we have very limited time for the theme itself, we will discuss later about the prisoners.

Now actually we move to Mexico. It's Mr Hector VASCONCELOS please.

Do we have problems in getting our Mexican colleague?

Now we have a bit of saved time because one of the committee chairs will not actually address us so we saved three minutes.

I have actually Mr Raimond KALJULAID and Mr Andrey EPISHIN on the list next.

If Mr Hector VASCONCELOS doesn't react now and doesn't seem to do so, Mr Raimond KALJULAID you are the next one, from Estonia, and then Mr Andrey EPISHIN from Russia.

Mr Raimond KALJULAID

Estonia, SOC

16:50:52

Thank you.

I do hope you can hear me. Estonia is a very highly digital society, so for us this debate is very, very important. It is also globally an urgent issue and it has been very interesting to follow it.

A few quick remarks. It seems that of course technological change has been very rapid and it has brought along economics change and social change and new opportunities and also new challenges. The pace has been very, very fast. I am afraid that it will be much faster in the future and more unpredictable.

I think that also following this debate today and looking at what these institutions have been doing, it is clear that both nation states and international institutions do have to be faster in this in the future too keep up with this very rapid technological and economic change going on in the world. We do have to be more agile I think, because at the moment we are trying to catch up with the global economy and make the tax system fairer. In the future, I do think it will be better if we are maybe even more able to react to changes in the global economy faster.

To save time, in conclusion, I am sorry that the Secretary General of the OECD has left, but I do hope that people from the institution are listening to us. I would just like to say that the data and analysis that the OECD provides to decision-makers is very valuable, also on tax issues. I just want to say I'm grateful for their work in that field.

Thank you very much.

Mr Kimmo KILJUNEN

Finland, SOC, President of the Assembly

16:52:42

For your consolation, I would say that the OECD is following the debate up to the end. So no problems on that one.

We caught the connection to Mexico, Mr Héctor VASCONCELOS, are you there?

OK. Seems to be so.

Mr Andrey EPISHIN, after him, and then we must finalise the list. Sorry. Time is not at all on our side. So let's be very swift when we are making decisions.

This has been a useful debate and that's why I allowed it to go on, but it doesn't... your connection doesn't work.

Then Mr Andrey EPISHIN, the floor is yours.

 

Mr Andrey EPISHIN

Russian Federation, NR

16:53:35

Good afternoon dear colleagues.

The Russian Federation as well as the international community as a whole understands that there are major insufficiencies in taxation rules for digital companies which have currently created a situation in which the effective corporate tax rate of these companies is much lower than for companies of other sectors, given the limited physical presence of these digital companies in the countries of residence of their users.

These problems are the catalyst for the development at an international level of the unified approach to taxation vis-a-vis business, and have led to new common rules about where these companies should be taxed and what portion of their profits to tax.

Russia supports the work of the OECD and the working group for the G20, the Inclusive Framework, that is in developing a consensus solution to tax challenges arising from the digital economy.

This work culminated in two documents, Pillar 1 and Pillar 2. The Russian Federation welcomes the efforts of the OECD and the Inclusive Framework, to reach a multilateral solution, by July 2021.

Overall we support the unified approach that is Pillar 1, that defines a new basis for taxation and new rules for profit allocation in digital economy.

At the same time, the Russian Federation supports the initial approach under which the revenue from the sale of raw materials and globally traded commodities, even if they are sold by the end user, should be excluded from the scope of Pillar 1.

At the same time, I'd like to note the particular position of the Russian Federation when it comes to the introduction of mandatory notice and dispute resolution mechanism or supranational arbitration especially when it comes to tax disputes that are not arising from the new approach of Pillar 1. Given our consistent policy on an international level that is not to agree to arbitration of provisions in international tax treaties, we are concerned about the mandatory implementation of the decisions of conciliation panels in the nationalisation of the Russian Federation.

At the same time, Russia supports the document dedicated to the remaining questions under the BEPS plan Pillar 2, and the defining principle under which large companies operating internationally are to pay tax, at a rate no lower than the minimum effective rate regardless of the jurisdiction of the companies' headquarters or business activities.

Thank you very much for your attention.

Mr Kimmo KILJUNEN

Finland, SOC, President of the Assembly

16:56:14

Thank you very much.

I'm so sorry to stop actually the debate now. We didn't get the connections to Mexico and there are three others on the list. You can actually submit your presentations to the Table Office.

Mr Alberto RIBOLLA

Italy, EC/DA

18:01:18

Speech not pronounced (Rules of Procedure, Art. 31.2), only available in Italian.

Mr Francesco BERTI

Italy, NR

18:01:19

(Undelivered speech, Rules of Procedure Art. 31.2)

How can an honorable member of the international community explain to the man of the street the fiscal injustice we are currently experiencing? How can we tolerate that, in an OECD and CoE member like Italy, Google has payed in 2019 5,7 million of euro in taxes, Amazon 11 million, Facebook 2,3 million and Netflix six thousand euro?

The digital services have better off our living standards and helped us to feel more connected with each other, but they have to contribute in a fair manner to the sustainability of our fiscal system.

During these though times, while member states are doing whatever they can to relief suffering to their population via monetary and fiscal stimulus, the big digital corporations have seen their share value at least double or triple, while the majority of the people is going through loss of jobs and the diminution of purchase power.

The international community know since long times that the tech industry and the global financial markets are not contributing enough to the global recovery. Regional organization and superpowers are showing no sufficient courage in tackling the challenges of our times.

The BEPS initiative put forward by the OECD, which gather 139 nation states, is struggling is setting minimum global standard of taxation. This initiative has done some progress, but is not yet able to protect states which have already enacted their digital tax like Italy, Spain or France from menaces of retaliation by the United States and its Trade Representative office (USTR).

The fiscal sovereignty of national european states is not a business variable of global companies. Our colleagues from the European Parliament have asked to the European Commission and the European council to work for a shared fiscal sovereignty that will create a fiscal union, a conditio sine qua non to tackle the big challenges of our times: paying back the debt issued for recovery programs, like NextGenerationEU, via a share of the profit of the global (digital) companies.

Mr Héctor VASCONCELOS

Mexico

18:02:19

(Undelivered speech, Rules of Procedure Art. 31.2)

Mr. President,

Mr. Secretary-General,

Ladies and Gentlemen:

Aside from climate change, I don't believe there is a bigger problem for contemporary humanity than wealth concentration around the world. It is known that the richest 1% of the world's population hold 43% of the world's wealth. To mention some facts: the 2,153 people or families who own more than a billion dollars in the world have more wealth than 60% of the world's population.

The super-rich not only enjoy extremely low levels of taxation but avoid up to 30% of their tax obligations. According to the Council of Europe, about 40% of multinationals' dividends migrate to tax havens. It is estimated that every year, the world's governments lose a total of $427 billion dollars to tax evasion. Developing countries lose about $170 billion dollars in tax revenue each year.

Such a situation is obviously unsustainable in the long run. The inequality revealed by this data is perhaps only comparable to the situation in France before the Estates General were convened, or to the situation in Russia before the October Revolution, always keeping proportions in mind.

It is in this context that the problem of taxation of digital companies must be addressed. Among the forms of wealth concentration that are of most concern today is the seemingly unlimited growth of companies related to recent technologies: I am referring to Google, Amazon, Microsoft, Tesla, Apple, Facebook, Twitter, and others for example. It is imperative that such companies be taxed in proportion to their growth. The situation is similar to what happened in the United States of America during the 19th century when oil, railroads, steel and automobiles companies and industries were developed. The economic power of these companies became unsustainable and led President Theodore Roosevelt to introduce the necessary measures to break up these monopolies in 1904.

This is not the first time in history societies have limited the excessive concentration of financial resources in the hands of a few. Today, the whole world is called to action to break these imbalances. Let us hope that, with the experience of the past, violent events are not required to achieve the socialization of wealth.

My congratulations and best wishes to Secretary General Gurría.

Thank you very much.

Mr Kimmo KILJUNEN

Finland, SOC, President of the Assembly

16:56:25

And now we move to the committee chairs.

First of all Mr Georgios KATROUGKALOS. Please, the floor is yours. Rapporteur. The maximum is three minutes. We prefer two, or one and half.

So, to Mr Georgios KATROUGKALOS, the rapporteur, please.