Good financial governance (GFG), i.e. the responsible handling of public finances, can contribute to an independence from international donors in the extractive sector. Standards and principles on transparency, accountability and rule of law, should be applied. Read here how the Extractives and Development Sector Programme is taking action in this regard.

The Extractive Industries Transparency Initiative (EITI) advocates for greater financial transparency and accountability of public revenues in the extractive sector. Read here how the Extractives and Development Sector Programme is involved.

Corruption risks extend along entire mineral value chains in the extractive sector, from bribery in the acquisition of licences to the misappropriation of public funds. Corruption distorts competition, reduces government revenues and undermines development-oriented budget allocation. Get more information on the topic of anti-corruption here.

An effective tax framework – strengthened through tax policy reforms and rigorous tax audits – is a critical prerequisite for exploiting the full tax potential of a country. In order to enhance domestic resource mobilization in partner countries, Germany supports the capacity building of tax authorities to identify tax risks and to investigate suspected cases of aggressive tax avoidance and tax evasion.

Combating illicit financial flows is an important concern of German development cooperation. The adoption of the EU Conflict Minerals Regulation will give new impetus to the issue of illicit financial flows in the extractive sector.