Paris, 14 September 2018 – “G20 leaders must do more to strengthen cross-border coordination and remove artificial barriers to help improve the business and financing environment for SMEs or we risk missing out on their productivity potential,” said Russel Mills, Secretary General, Business at OECD. “The fragmentation of domestic and cross border regulation, alongside access to finance and the challenges of the digital transition, remain major barriers to growth for SMEs worldwide.”

Small and medium sized businesses’ ability to participate in international markets and global value chains has not been fully developed. A new report (available here) from Business at OECD and B20 calls on G20 leaders to follow four core recommendations to this end:

 

1. Pursue balanced reforms that promote productivity, economic growth and stability. 

1. Foster interoperable global regulatory frameworks, and commit to consistent implementation through coordination and consultation, supported by independent impact assessments both pre and post implementation. 

1. Develop digital policies and strategies aimed at facilitating SME growth that eliminate cross-border differences. 

1. Maximize data access and information sharing through digital platforms for a coordinated response to global challenges: cyber security, the digitalization and the transition to a low-carbon economy.

Gianluca Riccio, Chair of the B20-Business at OECD Roundtable on SMEs and GVCs said, “OECD research shows us that SMEs, and especially new and fast-growing businesses, still face challenges in meeting their full productivity and employment potential. To tackle this issue we urge coordinated action between G20 Presidencies, supported by input from the respective B20 communities.”

The report builds on the findings of a high level seminar held at the OECD Headquarters in Paris in May 2018, as a joint initiative between Business at OECD and B20 Argentina.

 

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Paris, 4 September 2018 – As of this week, Russel Mills has joined Business at OECD as Secretary General and will lead the engagement with its global constituency of leading national business organizations, their respective member companies, and with the OECD and member governments on global governance. To this end, he will deepen Business at OECD’s strategic dialogue with the OECD Secretary General and senior government officials. Mr. Mills succeeds Bernhard Welschke who served as Secretary General from April 2013 until July 2018.

Mr. Mills brings four decades of experience in market development, technology exploitation, and global business management to his new position as Secretary General. He has also set up small businesses and worked for charities. His background will be essential to strengthen Business at OECD’s collaboration with OECD and member governments to ensure businesses can operate, trade and invest in open and fair markets thus contributing to the wealth creation that enables societies to flourish.

Commenting on his appointment, Mr. Mills stated: “business relies on progressive international organizations like the OECD to develop policy ideas and implementation processes that help us adapt to a rapidly changing world whilst ensuring long-term economic sustainability. To this end, we plan to leverage our unparalleled business network in all OECD countries and beyond and ensure our contributions to global policymaking will be impactful.”

Mr. Mills’ global, on-the-ground experience spans across the United States, the United Kingdom, the Netherlands, Belgium and Switzerland where he held global responsibilities across a wide variety of sectors, including in the chemical industry and related manufacturing sectors. Mr. Mills previously chaired the Environment and Energy Committee of Business at OECD for over 5 years, representing the organization in several Ministerial meetings. He is a UK national, and speaks English and conversational French and German. He is a physics graduate of Oxford University.

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Patchwork financial regulation is a $780 billion drag on the economy

New York/Paris, April 11 2018 – Fragmentation in global financial regulation costs more than USD $780 billion annually, according to a survey released today by IFAC (International Federation of Accountants) and Business at OECD (BIAC).

The survey, Regulatory Divergence: Costs, Risks, Impacts: An International Financial Sector Study, examines the cost of regulatory divergence by taking the pulse of more than 250 regulatory and compliance leaders from major global financial institutions. The results quantify the massive impact of fragmented regulation: material economic costs, financial system risk, and barriers to economic growth.

Regulatory divergence, which refers to inconsistencies in regulation between different jurisdictions, costs financial institutions between 5 to 10% of annual revenue turnover, according to the survey findings. Over half (51%) of respondents said resources have been directed away from risk management due to the costs associated with diverging regulation.

The $780 billion price tag is conservatively inferred by the findings, with smaller institutions (annual turnover less than $100 million) twice as likely as their larger counterparts to experience very material costs.

“There is clear evidence that reforms implemented since the last financial crisis have resulted in fragmentation that consumes valuable resources, including those that could otherwise be focused on de-escalating the risk of the next crisis,” said Fayezul Choudhury, CEO of IFAC. “In particular, the competitive disadvantage for small and medium sized institutions should serve as a wakeup call for policy makers.”

The costs of regulatory divergence are felt most strongly in the capital markets sector, with 92% of respondents indicating material or very material costs, followed by banking (76%) and professional services (66%).

“The impact of fragmented regulation on growth is troubling, as non-tariff barriers to trade and investment stop businesses from expanding internationally, which undermines job and wealth creation,” said Bernhard Welschke, Business at OECD (BIAC) Secretary General.

“The survey highlights the need for increased international regulatory co-operation to reduce the regulatory divergences which are costly on business. Pioneering OECD work in this area helps countries improve the way they cooperate on regulatory matters across borders to achieve their public policy objectives and reduce unnecessary costs for business and citizens,” said Marcos Bonturi, Organisation for Economic Co-Operation and Development (OECD)’s Director for Public Governance.

Business at OECD (BIAC) and IFAC recommend enhancing international cooperation among regulators, increasing overall alignment in regulation, and ensuring transparency in international rule-setting to mend the fractures caused by regulatory fragmentation.

 

Media Contacts:

Genna De Rose
IFAC Communications
IFAC
geenaderose@ifac.org
+1-646-277-9390

Ali Karami-Ruiz
Director, Policy, Communications, and International Affairs
Business at OECD (BIAC)
karamiruiz@biac.org
+33 (0)142 300 960

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Brussels, 21 March 2018 – In response to the proposals of the European Commission on Fair Taxation of the Digital Economy released today, Business at OECD (BIAC) warns against fragmentation in international taxation and calls for a for broad consensus on a reliable tax framework for all companies. Unilateral action targeting certain businesses and deviating from established principles will reduce the potential for economic growth and job creation, particularly where these measures are based on the taxation of gross revenue rather than on profits.

Will Morris, Chair of the BIAC Committee on Taxation and Fiscal Affairs said: “Business at OECD believes that the OECD/G20 Inclusive Framework is the most appropriate forum in which to advance tax policy addressing digital taxation.  We strongly encourage the EC to work with the OECD/G20 Inclusive Framework to help develop global consensus through a broad multilateral process that includes business and all stakeholders.”

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Paris, 16 March 2018 – In response to the OECD/G20 Interim Report on the Tax Challenges Arising from Digitalisation (“Interim Report”) released today, Business at OECD (BIAC) applauds the forward-thinking, multilateral approach of the OECD, which aims to deliver a global consensus on taxation of the digital economy to facilitate and not hinder cross border trade, investment, and growth.

In line with the report, we agree with the OECD that “the digital economy” cannot be ring-fenced. Attempts to do so will harm growth through distorting business activities and levying tax multiple times on the same profits.

Will Morris, Chair of the BIAC Committee on Taxation and Fiscal Affairs said: “Digitalization is the key to future growth, so a structured conversation with a very broad group of countries aimed at global solutions is now urgent. Unilateral action would only lead to costly fragmentation, double (or multiple) taxation, and harmful barriers for our economies.

Business at OECD will continue to engage with the OECD and governments on digital taxation issues going forward, and points to the OECD Inclusive Framework on taxation that includes more than 100 countries and territories as the most appropriate forum for this pertinent issue.

About Business at OECD (BIAC)

Business at OECD (BIAC) speaks for business at the OECD. Established in 1962, we stand for policies that enable businesses of all sizes to contribute to growth, economic development, and prosperity. Through BIAC, national business and employers federations and their members provide expertise to the OECD and governments for competitive economies, better business, and better lives.

For more information, contact Ali Karami-Ruiz, Director, Policy, Communications, and International Affairs.

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Paris, 9 March 2018 —Building on previous work on gender equality, Business at OECD (BIAC) hosted a seminar today to explore how stakeholders can overcome unconscious bias, bringing together OECD governments, senior management, and industry representatives. “We need more determination, open minds and practical steps to employ the great potential of women for more inclusive and productive economies”, said Bernhard Welschke, Business at OECD (BIAC) Secretary General. “Business at OECD engages with our business communities in all OECD countries towards that goal.”

The event marked the launch of a new Business at OECD (BIAC) report “Preparing All our Minds for Work: Girls, women, and learning over a lifetime”, which identifies business actions and public policy recommendations focusing on efforts in the technology sector. The report points to the importance of STEM education to advance successful careers of both women and men, and offers insights to address cultural, societal and institutional barriers to gender equality.

Offering examples of current business initiatives, the meeting also featured a presentation by DELL on the MARC (Men Advocating Real Change) initiative, which aims to identify unconscious bias in the workplace and promote a more collaborative leadership style.

The report on gender equality and skills is the fourth in a series of reports, and provides case studies from Business at OECD global members that recognize the links between gender equality and economic prosperity, productivity, and competitiveness. Business at OECD’s work on gender can be found here:

Putting ALL Our Minds to Work: Harnessing the Gender Dividend (2012);

Putting ALL Our Minds to Work: An Assessment (2014);

Putting ALL Our Ideas to Work: Women and Entrepreneurship (2015);

Preparing all our Minds for Work:  Girls, women, and learning over a lifetime (2018)

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Paris, 12 December 2017 — While progress has been made in creating cultures of integrity, corruption continues to seriously affect our economies and societies. Marking the 20^th anniversary of the OECD Anti-Bribery Convention, Business at OECD (BIAC) confirms the importance of an integrated and effective approach in the fight against corruption, which is a global challenge and requires international cooperation.

“Corruption is a cancer for the global economy and seriously compromises the health and productivity of our economies and value chains across the globe. The legally binding standards of the Anti-Bribery Convention have clearly positioned the OECD as a leading force in the international fight against corruption,” said Dr. Klaus Moosmayer, Chief Compliance Officer of Siemens and BIAC Anti-Corruption Chair. Speaking at the OECD Roundtable on 20 years of the Anti-Bribery Convention, Moosmayer called on the OECD and governments to step up efforts and also address the demand side of bribery, recognize the compliance efforts of companies, and support voluntary self-disclosure. “We recognize the urgency of this agenda”, said Moosmayer. “The private sector should be considered as a key partner in this struggle.”

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Paris, 27 October 2017 – Well-designed health policies that are put into practice are essential for the growth and productivity of our economies and the well-being of our societies. This was the main message from private sector, government representatives, and the OECD gathered for the 2nd Business at OECD (BIAC) Annual Forum on Health. The […]

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Paris, 28 September 2017 — In response to recent European proposals and in advance of the EU Digital Summit on 29 September 2017, Business at OECD (BIAC) expressed deep concerns that unilateral action for the taxation of the digital economy will lead to serious distortions in markets and global value chains.

“Business at OECD representing corporate communities across the globe is fully and constructively engaged in the OECD/G20 process to address Base Erosion and Profit Shifting (BEPS), including Action 1 on the digital economy”, confirmed Bernhard Welschke, BIAC Secretary General. “We recognize there are important and complex issues concerning the digitalization of our economies. However, unilateral action in this field will lead to costly fragmentation and threatens to diminish the considerable potential for growth and innovation. Only a comprehensive multilateral engagement between tax authorities, taxpayers and other stakeholders will lead to outcomes that support a successful digital transformation. Therefore, the OECD is the most appropriate forum in which to pursue this engagement, and we encourage all countries to participate in this multilateral effort”, explained Welschke.

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Paris, 28 June 2017 — Business considers the responsible conduct of companies across markets as stipulated by the OECD MNE Guidelines to be an integral part of an open investment environment, while stressing the need for practical and manageable expectations. This is the central message of a high-level conference organized by Business at OECD (BIAC) today in Paris.

The OECD Guidelines include a unique implementation mechanism in the form of National Contact Points (NCPs). “The experience with the NCP system has been mixed. In some cases, it had a clear added value for companies, in other cases it was criticized. It is therefore important to have a common understanding among all stakeholders about the nature of the NCP process as a platform for mediation and problem-solving in good faith, which is different from legal litigation,” said Winand Quaedvlieg, Chair of the BIAC Committee on Investment and Responsible Business Conduct. Business will continue to work with the OECD to underline the conditions that must be in place to facilitate the proactive engagement of business in the process.

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