Chapter 4: Addressing resource diversion and foregone tax revenues To fulfil obligations to devote maximum available resources to the enjoyment of economic, social and cultural rights, states must not only generate greater resources but also avoid resource diversion, such as corruption, tax evasion and capital flight.257 Adherence to the rule of law is an essential precondition here. Human rights monitoring bodies’ efforts make evident that states that continue to tolerate resource diversion cannot claim insufficient resources as a justification for not implementing economic, social and cultural rights. 4.1 Illicit financial flows In recent years, the UN human rights system has increasingly focused on the issue of illicit financial flows. The UNHRC has issued specific resolutions on the topic and asked its Advisory Committee to conduct a study on the impact of illicit financial flows on the enjoyment of human rights.258 Treaty bodies and special procedures have also lent increased attention to the issue. For example, in its Concluding Observations, the CESCR ‘urged’ some States Parties to take ‘rigorous measures’ to combat illicit financial flows, tax evasion and fraud ‘with a view to raising national revenues and increasing reliance on domestic resources’.259 This increased attention on the topic dovetails with SDG commitments. Under the 2030 Agenda, states have committed to significantly reducing illicit financial flows by 2030 (SDG 16.4). The Independent Expert on foreign debt, whom the UNHRC requested to study the topic in depth, has classified a wide range of phenomena, including corruption, tax evasion and tax avoidance, as illicit financial flows.260 This section addresses each of them separately, also examining what other treaty bodies and special procedures have said on the subject. Yet, as noted by the Independent Expert on foreign debt, the majority of illicit financial flows are related to cross-border tax-related transactions: ‘curbing tax-related illicit financial flows thus has the potential to make the largest fiscal impact and would enlarge domestic resources available for the realisation of human rights, including social, economic, and cultural rights’.261 257 See, eg, ‘Report of the Special Rapporteur on poverty, Magdalena Sepúlveda Carmona’ (2014) UN Doc A/HRC/26/28. See also, CESCR Concluding Observations Romania E/C.12/ROU/CO/3-5 (2014), paras 7–8; CRC, General Comment No 19 (2016), UN Doc CRC/C/GC/19; and Concluding Observations Togo CRC/C/TGO/CO/3-4 (2012). 258 See, eg, Resolution A/HRC/31/L.24/rev 1 on the negative impact of the non-repatriation of funds of illicit origin to the countries of origin on the enjoyment of human rights, and the importance of improving international cooperation. 259 See, eg, Concluding Observations Honduras E/C.12/HND/CO/2 (2017), para 20; Concluding Observations Kenya E/C.12/KEN/20/2-5, para 18. 260 ‘Report of the Independent Expert on foreign debt, Juan Pablo Bohoslavsky’ (‘Final study on elicit financial flows, human rights and the 2030 Agenda for Sustainable Development’) (2016), UN Doc A/HRC/31/61, para 5. 261 ‘Report of the Independent Expert on foreign debt, Juan Pablo Bohoslavsky’ (‘Final study on elicit financial flows, human rights and the 2030 Agenda for Sustainable Development’) (2016), UN Doc A/HRC/31/61, para 5. December 2017   The Obligation to Mobilise Resources: Bridging Human Rights, Sustainable Development Goals, and Economic and Fiscal Policies 67