PROGRESS REPORT ON AMOUNT A OF PILLAR ONE
The BEPS Monitoring Group, 24 August 2022
The BEPS Monitoring Group submitted comments to the Public Consultation on the Progress Report on Amount A of Pillar One released by the OECD in July on behalf of the Inclusive Framework on BEPS. Abdul Muheet Chowdhary, Senior Programme Officer of the South Centre Tax Initiative, was a contributor.
Impact of a Minimum Tax Rate under the Pillar Two Solution on Small Island Developing States
By Kuldeep Sharma
The Research Paper commences with an overview of Pillar One and Pillar Two followed by detailed discussions on salient provisions of Pillar Two.
Pillar Two is envisaged to have a widespread impact on Small Island Developing States (SIDS) which are a distinct group of 38 United Nations (UN) Member States and 20 Non-UN Members/Associate Members of UN regional commissions that are exposed to unique social, economic and environmental vulnerabilities. In all, 36 SIDS that are members of the Group of Seventy-Seven (G-77) have been analysed, namely, Antigua and Barbuda, Bahamas, Bahrain, Barbados, Belize, Cabo Verde, Comoros, Cuba, Dominica, Dominican Republic, Fiji, Grenada, Guinea-Bissau, Guyana, Haiti, Jamaica, Kiribati, Maldives, Marshall Islands, Mauritius, Federated States of Micronesia, Nauru, Papua New Guinea, Samoa, São Tomé and Príncipe, Seychelles, Singapore, Solomon Islands, St. Kitts and Nevis, St. Lucia, St. Vincent and the Grenadines, Suriname, Timor-Leste, Tonga, Trinidad and Tobago, and Vanuatu.
Webinar: Exploring Linkages between Climate Change, International Investment and the Legally Binding Instrument on Business and Human Rights
27 September 2022
Virtual event
Time: 15:30 – 17:00 CEST
Facilitated by the South Centre, this webinar is an opportunity for participants representing developing country governments, civil society and academia to exchange views and discuss the linkages between Climate Change, International Investment reforms and the Legally Binding Instrument, and how to harness their common elements to recover better, build resilience against future crises and achieve the UN 2030 Agenda & the SDGs.
WTO Public Forum 2022 Working Session: Mainstreaming Development in the WTO
30 September 2022
WTO Room E
Time: 11:30-12:45 CEST
The Global South has a fundamental interest in the WTO. In framing the future of trade, reforming and strengthening the organisation requires mainstreaming development in the WTO. The primary question is how to ensure that the broader development dimension of the multilateral trading system is advanced and not simply relegated to polarising conversations about special and differential treatment. This session explores ways in which the multilateral trading system can meaningfully address the needs of developing countries including LDCs. These include assessing different approaches to build greater equity in the trading regime, considering ways to improve the capacity for developing countries to benefit from trade, establishing a deeper role and voice for developing countries including LDCs in developing balanced trade rules, and examining how they can exercise their right to fully participate in the consensus-based decision-making processes of the WTO.
The South’s Role and Responsibilities in the Next Phase of Multilateralism
By Elizabeth Sidiropoulos and Luanda Mpungose
The global erosion of trust in the global institutions is the direct result of non-delivery on the most crucial challenges that face humanity such as inequality, poverty, and climate change. South-South Cooperation can play a vital role in reinvigorating multilateralism. Beyond its horizontal engagements it has already begun supporting and enriching processes, institutions and norms-building at the global level. However, changing the superstructures that have discriminated against many developing countries will require a strategy that involves prioritising, coalition-building and coordination.
Brazilian Competition Law and Access to Health in Brazil: Exploitative Pricing in the Pharmaceutical Sector
By Bruno Braz de Castro
This paper aims to analyze the interfaces between Brazilian Competition Law and the issue of access to medicines, with a special focus on abuse of industrial property rights and related exclusionary and exploitative effects. The paper analyzes the case law of Brazilian Administrative Council for Economic Defense (CADE) in the pharmaceutical sector and discusses abusive practices such as illegitimately imposing non-existent or invalid intellectual property rights with anticompetitive purposes. It then addresses abusive strategies in the exercise of industrial property rights which are, in essence, valid: i.e., exclusionary practices, aimed at artificially raising barriers to entry; and exploitative practices, directly translated as the exercise of market power to the detriment of the consumer. The latter ultimately result in exploitative excessive prices; contractual, quality or privacy degradation; and restrictions on supply, such as by hoarding/preventing the exploitation of industrial property rights. The paper concludes that the prohibition of exploitative pricing under the current competition law is legally valid and effective, with certain methodological concerns towards reducing the risk of wrongful convictions (for instance, by applying screening tests to determine the markets that are candidates for intervention). In view of such guidelines, the pharmaceutical industry appears to be an important candidate for antitrust attention, given the magnitude of the harm potentially derived from non-intervention against the practice. Remedies in this area, importantly, should focus on identifying and solving the sector’s structural competitive problems. In the case of medicines subject to price regulation by the Drug Market Regulation Chamber (CMED), the technical expertise of the competition authority may be of great value in terms of competition advocacy, a fact that is demonstrated in light of recent discussions on extraordinary price adjustments because of competitive problems in certain markets.
Competition Law and Intellectual Property: A Study Drawing from The Eli Lilly Case on ‘Sham Litigation’ in Brazil
By Pablo Leurquin
Competition authorities may be the best equipped institutions to penalize certain illicit practices that involve intellectual property rights. This article analyzes the decision by the Brazilian Administrative Council for Economic Defense (Conselho Administrativo de Defesa Econômica – CADE) in the Eli Lilly case, in which the company was convicted for abusive use of the right to petition (sham litigation) with anti-competitive effects. It examines general aspects of technological dependence in the Brazilian pharmaceutical industry, presents the legal premises necessary for the understanding of the decision made by the competition authority, and analyzes the legal grounds for the sanction imposed on Eli Lilly.
¿Una elección difícil? Comparación de los ingresos fiscales que recaudarán los países en vías de desarrollo a partir de los regímenes del Monto A y del Artículo 12B de la Convención Modelo de las Naciones Unidas
Por Vladimir Starkov y Alexis Jin
En este documento de investigación, pretendemos calcular los ingresos tributarios que obtendrán (o perderán) los Estados miembros del South Centre y la Unión Africana con arreglo a los regímenes del Importe A y del Artículo 12B. En nuestro análisis hemos recurrido a fuentes de información disponibles para el personal investigador del sector privado, aunque no ha conllevado el examen de ninguno de los datos que los contribuyentes proporcionan a las autoridades fiscales. Nuestra investigación demuestra que los efectos comparativos en los ingresos obtenidos con los regímenes fiscales del Importe A y el Artículo 12B dependen en gran medida de a) los detalles de diseño del régimen del Artículo 12B; b) si el país es sede de empresas multinacionales que puedan estar dentro del ámbito de aplicación de los regímenes fiscales del Importe A o del Artículo 12B; y c) la desgravación a partir de la doble tributación, de haberla, que conceda el país a los contribuyentes nacionales sujetos al pago de tributos en virtud del régimen del Importe A o del Artículo 12B.
South Centre Comments on Progress Report on Amount A of Pillar One
The South Centre offers its comments to the OECD Inclusive Framework’s Task Force on Digital Economy (TFDE) on the Progress Report on Amount A of Pillar One.
In June 2022, the Coalition for Dialogue on Africa (CODA), a Special Initiative of the African Union, and the South Centre, jointly released country-level revenue estimates from Amount A compared with Article 12B of the UN Model Tax Convention, for the 84 combined Member States of the African Union and the South Centre. CODA and the South Centre have also provided a set of recommendations to developing countries on the taxation of the digitalized economy.
The Progress Report on Amount A, the latest version of the OECD’s proposed solution for taxation of the digitalized economy, makes it clear that the revenues expected for developing countries will dwindle even further than estimated by CODA and the South Centre.
With each successive update of the rules, the proposed solution is becoming increasingly less appealing to the developing countries. The OECD must, at a minimum, release revenue estimates for the 141 jurisdictions of the Inclusive Framework such that each can take an informed decision in the national interest. As an organization that sets ‘transparency’ standards, OECD must itself be transparent and provide countries with the essential information needed for making what may become a historic decision for the international taxation regime.
The Human Right to Science: From Fragmentation to Comprehensive Implementation?
By Peter Bille Larsen and Marjorie Pamintuan
In times when the role of science in society is more debated than ever in polarized, politicized and partial terms, what is the role for the human right to science and rights-based approaches? The right to science remains poorly understood and neglected in both national and global human rights processes. Beyond defending the freedom of scientific expression, upholding the right to science is arguably fundamental to resolving key sustainability challenges of our times from climate change and the biodiversity crisis to global health and pandemics. The global COVID-19 pandemic has revealed persistent global inequalities not least in terms of how the privatization of science and current intellectual property regimes hinder just and equitable responses to access science and its benefits. This prompts the need for a shift from single-issue approaches to comprehensive and systematic treatment of the right to science as a bundle of human rights across multiple arenas to counter fragmentation and silo-tendencies.
The Proposed Standing Multilateral Mechanism and Its Potential Relationship with the Existing Universe of Investor – State Dispute Settlement
by Danish and Daniel Uribe
The reform option on the Standing Multilateral Mechanism (SMM) currently under discussion at UNCITRAL’s Working Group III (WGIII) has raised a number of important, systemic concerns for the procedural reforms of investor-State dispute settlement. This paper first seeks to situate the discussions on the SMM within its historical and contemporary contexts. Then it considers UNCITRAL Working Paper 213 and the legal provisions it contains, which form the basis of ongoing discussions of this reform option at WGIII. Further, it explores the potential relationship of this proposed SMM with different facets of the existing international investment law regime. The paper concludes by providing some elements which require further consideration in this process, particularly for safeguarding the interests of developing countries.
TAX CERTAINTY FOR PILLAR ONE AMOUNT A
The BEPS Monitoring Group, 12 June 2022
The BEPS Monitoring Group submitted comments to the OECD on the consultation draft proposals to provide tax certainty for Amount A of Pillar One. Abdul Muheet Chowdhary, Senior Programme Officer of the South Centre Tax Initiative, was a contributor.
