The price of fairness: Tackling mispricing of commodity exports from poor countries

For decades, countries in Africa, Asia, and Latin America have remained trapped in poverty despite continuously exporting valuable commodities with which they are richly endowed – including oil, metals, plant proteins, grains, and more. This policy brief outlines one of the key causes of this harmful, unjust phenomenon: trade mispricing. More importantly, it introduces a raft of measures that can be taken to stop revenue losses from trade mispricing – in particular measures that commodity-exporting poor countries can implement unilaterally.

Photo: Mahdi Abdulrazak

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Key messages

  • Poor countries lose billions of dollars annually to mispricing of their commodity exports – including oil, copper, and other primary commodities that are crucial to global development and the infrastructure of the future.
  • At the industry level, new technologies like smart containers, blockchain, and automated data matching can be introduced to eliminate room for trade-related fraud.
  • At the country level, low-income countries can proactively combine short- to mid-term policies to counter the revenue effects of trade mispricing. They can leverage new funding mechanisms for independent mineral valuation, set up robust buyer selection processes, legislate various tax-related uses of reference prices and margins, and enforce restrictions on deductible taxpayer costs for multinational companies.
  • In the longer term, more ambitious policies like unitary taxation with formulary apportionment might be introduced to better share the revenues from global value chains – especially those dominated by multinationals.

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Global trade, we are often told, benefits everyone. And in rich countries especially, it is hard to imagine life without it. From our morning coffee to the smartphone in our pocket, our reliance on goods from abroad is ubiquitous. Asked to explain the benefits of trade, many would likely refer to the old idea of “comparative advantage”: different countries will make and export what they are most efficient at, and import what they need from others.

Of course, the reality of trade today is vastly more complex. Webs of elaborate “value chains” – spanning financing, production, processing, trade, etc. – now crisscross the world. And multinational companies have arguably become the dominant architects and beneficiaries of trade and financial flows. Meanwhile, state (and citizen) power has declined. One symptom of this is an ongoing regulatory race to the bottom – e.g. cutting taxes and social or ecological protections – among states competing to host different “links” in each value chain, whether manufacturing, corporate headquarters, or management of related financial flows.


Resource rich, yet poor

Indeed, the benefits of trade do not always appear as mutual as they should. Instead, we witness many countries – and social classes – pitted against each other over the right to claim shrinking shares of circulating value. This is acutely visible in the area of commodity production and trade: Clusters of countries in Africa, Asia, and Latin America have stayed poor for decades despite exporting valuable commodities for which they have a comparative advantage – resources like fossil fuels, metals, gems, plant proteins or oils, grains, and more.

This paradox of resource-rich poor countries highlights the urgent need for changes in the legal architecture and hands-on operation of trade. While there are many aspects that must be tackled, one problem in particular is consistently emphasized by experts: that of so-called trade mispricing.

Trade mispricing occurs when parties involved in a trade – for example, two related companies – misstate or deliberately manipulate the sale price, quantity, or nature of particular goods (e.g. copper or lithium) exported by one party and imported by the other. In other words, they trade or transfer goods at a price that differs from their “fair market” value. Such mispricing might be done, for example, to avoid paying appropriate taxes or royalties in the exporting country. Other times, it might even be done to launder money, smuggle goods, or hide bribes paid to politically exposed persons. In most cases, it involves illicitly moving economic value (e.g. goods, profits) across borders. And all too often, the costs are borne by countries and populations who can least afford it.

Photo: GovernmentZA


Harms of trade mispricing

Observers cite trade mispricing as one of the biggest sources of illicit financial flows (IFFs) out of developing countries – including up to 50% of such flows out of African countries.1 Empirical findings from the ongoing Swiss r4d project on IFFs (www.curbing-iffs.org) point to significant undervaluation of commodity exports from specific countries (Ghana and Lao PDR).2 Overall, the NGO Global Financial Integrity estimated that 25% of all developing country trade was mispriced in a recent 10-year period.3

Again, one sector in particular appears uniquely susceptible to these value manipulations: the commodity sector, involving the production and trade of raw materials. More specifically, it is extractive industries like mining and oil production that are especially risk-prone.4 UNCTAD estimates that roughly USD 40 billion was illicitly moved out of Africa alone in 2015 by underpricing extracted and exported goods like gold and gemstones.5

These illicit activities deprive vulnerable countries of urgently needed foreign exchange income (i.e. euros, dollars, and francs) and erode the tax base they need to care for their populations. For example, UNCTAD estimates that African countries suffering high levels of capital flight (including from trade mispricing) could cut the mortality rate of children under five from 59% to 20% if such financial losses were prevented and instead invested in the health sector.6 Turning to pressing climate change needs, curbing illicit financial flows could contribute nearly half the investment needed for adaptation and mitigation measures in Africa.7

Photo: Terence Wright


Sources of vulnerability

The question is how it is even possible to manipulate prices and siphon off wealth this way. After all, are we not dealing with markets subject to internal laws, like competition, and external controls, like tax and customs authorities? On the country level, a variety of weaknesses in developing countries make such manipulations possible. These include corruption and poor governance, the opacity and complexity of commodity transactions, severe asymmetries in information access between powerful companies and weak states, and the limitations of under-resourced customs authorities in low-income countries.

More broadly, however, there is a major global-level structural issue at play which goes unnoticed by most casual observers of trade: It is the long-standing “legal fiction” that allows related companies – such as parent companies and subsidiaries of the same multinational corporation – to “trade” with each other and be treated and taxed as if they were actually unrelated parties.8 This incentivizes multinationals to find ways, like trade mispricing (or abusive transfer pricing), to shift value and profits across borders into their divisions in low-tax countries, for example corporate hubs in Europe. They are supposed to use “arm’s length” prices (i.e. real market-based valuations) for the goods they transfer (simulating trade) between their divisions.9 But the incentives to boost multinational-level company profits through accounting tricks are immense.

Photo: International Labour Organization (ILO)


Ways to combat mispricing

Clearly, commodity-dependent developing countries cannot afford to lose revenues through trade mispricing any longer. They need and deserve to use their own resources for their own development. To this end, the r4d IFFs team – including CDE legal experts and experts from Ghana and Laos – have identified methods for commodity-producing countries to counter mispricing of their exports.10 Of particular importance are measures that can be taken relatively quickly. Promising approaches include the following:

Use of “smart” technologies. With proper support (ideally industry-wide), several new hands-on technologies could be rapidly introduced to detect and discourage meddling with physical commodities or documentation in transit. Electronic seals could replace single-use mechanical seals on cargo containers, triggering an alarm and recording evidence in the event of any tampering.11 Smart containers equipped with tracking devices and sensors could be implemented, providing real-time data on container position, temperature, movement, shocks, door opening, etc.12 Fixed scanners capable of scanning hundreds of containers per hour could be installed at points of export and import, allowing systematic two-dimensional x-ray scanning of all goods, prior to customs clearance.13 Blockchain technology, finally, could be used to provide a decentralized, near-unalterable record of commodity transactions, helping to prevent document (e.g. invoice) manipulations once they enter the accounting chain.14

Automated data matching. Another readily available option to help identify and prevent trade-related fraud would be automatic cross-checking of key documentation. For example, commodity export documents could be systematically matched with import documents to uncover any inconsistencies between recorded sale and purchase prices.15 Likewise, customs forms could be cross-checked with income tax returns filed by buyers in importing countries, making it possible to spot discrepancies in commodity values set for customs versus tax purposes. However, making such data matching work will require some harmonization between countries: Operationally, there is a need for use of electronically filed, standardized forms across jurisdictions, as well as universally recognized unique entity identifiers across firms. Institutionally, there is a need for greater international cooperation between authorities in customs, revenue/tax agencies, banks, and governments.16

Photo: Camilo Rueda López


Prescriptive approaches to taxation. Notably, low-income countries also require mispricing countermeasures they can implement more or less unilaterally – especially where funds and international cooperation are lacking for expensive technology and information exchange. Several “prescriptive” approaches can be applied directly to deter price manipulation and revenue losses:17

  • Under the so-called six method of transfer pricing law, countries can mandate the use of market reference prices when auditing trades between related parties. In Zambia, for example, mining companies are legally required to use publicly quoted benchmark prices as a basis to determine the transfer price of mineral commodities.18
  • In administered pricing, the government (rather than companies themselves) can directly establish the value of commodity-related transactions for tax purposes. Here, prices calculated by a trusted committee of experts can be used by governments to determine the commodity-related income taxes and royalties they are due, rather than manipulation-prone transfer prices. Norway uses such an approach to price its oil exports.19
  • With referencing in contracts, countries can mandate use of reference prices or price formulae directly in commodity sales contracts. For example, they can require that certain terms – options, caps, and lower limits – be included in metals streaming agreements, long-term supply arrangements, and other complex trade deals in commodities.20
  • Alternatively, countries can apply fixed profit margins and markups to certain types of transactions or specific lines of business. For example, under Brazil’s transfer pricing law, the accepted “arm’s length price” for commodity exports between related parties is the resale (wholesale/retail) price in the destination country, minus a fixed profit margin.21
  • Finally, poor countries can introduce restrictions on deductible taxpayer costs, for example regarding interest and royalties paid by local mining companies to offshore entities, so as to preserve the tax base where commodities are actually sourced.22

Whatever the technique used, “prescriptive” methods are a powerful, targeted means of countering trade mispricing and preventing or restoring lost profits on behalf of exporting countries.

Photo: Chris-Håvard Berge


Accurate valuation of minerals. Fast action could also be taken by poor countries to prevent deliberate or mistaken underestimation of the quality (e.g. grade/purity) – and thus sale price – of their commodities (e.g. oil). If they cannot verify the quality of their mineral resources on their own, low-income countries could contractually require private mining companies or commodity buyers to pay for inspection of quality by independent experts. Alternatively, they could levy a fixed annual fee for independent quality inspection, also payable by private buyers or mining companies.23

Improved buyer selection by state companies. Of course, state-owned companies – or unethical actors within them – can also play a role in undervaluing of goods, for example by selling low to corrupt buyers in return for hidden kickbacks. A variety of practices could be adopted to prevent improperly valued sales by state companies. These include: establishment of independent buyer-selection teams free from political influence; use of predetermined, quantifiable buyer selection criteria; introduction of standardized, automatic procedures for bid submission; and use of standardized contractual guidelines in direct negotiations with buyers. Notably, all information on the bidding processes should be made public to ensure accountability.24

Photo: shutterstock / panuwat phimpha


Longer-term solutions

More ambitious policies to tackle trade mispricing would require much greater international cooperation. Of particular note are reforms aimed at taxing multinationals as what they actually are: unified global firms with value-chain subdivisions – e.g. extraction, refining, trading, retail – located in different countries/legal jurisdictions. Under global profit-split approaches – e.g. unitary taxation with formulary apportionment – the total global profits of a multinational firm would be pooled together and then apportioned between jurisdictions based on internationally agreed factors that reflect its real economic activity in each jurisdiction.25 Notably, this type of approach would finally address the founding legal fiction that treats related companies as if they were separate market actors engaged in “free trade”.

Should credible profit-split negotiations ever emerge, commodity-exporting poor countries will have to apply major pressure to make sure the resulting formulas for allocation of (taxable) value actually help them – i.e. give them a larger slice of the global profit pie – rather than hurt them. Overall, the challenge of fair taxation and fair trade is ultimately political, not technical, in nature.26

POLICY IMPLICATIONS

Resolve to tackle mispricing of exports, especially from developing countries

Trade mispricing, including undervaluing of commodity exports, is a major source of illicit financial flows from poor countries. As much as 25% of all exports from developing countries are mispriced, according to recent estimates. In one year, for example, African countries can lose tens of billions of dollars to mispricing of high-value exports like precious metals. These countries deserve to use these revenues to address their own needs.

Take fast action to eliminate space for fraud across the entire sector

Emphasis should be placed on industrywide measures that can be taken quickly to prevent mispricing of shipments. A number of new “smart” technologies could be introduced to detect or prevent manipulation of goods or price-relevant documentation. These include electronic seals and tracking devices for cargo containers, fixed (x-ray) scanners at export and import locations, and blockchain accounting ledgers that are accessible to all trading partners and cannot be tampered with. Finally, automated cross-checking of key documentation (e.g. import/export and tax forms) could be put in place to uncover pricing inconsistencies. Use of standardized forms across jurisdictions and universally recognized identifiers for specific goods could enable this.

Empower low-income countries to act in their own tax and revenue interests

Poor countries also need tools to counter mispricing that do not rely on the (often lacking) cooperation, funding, and political will of their wealthier trading partners. Innovative methods of prescriptive approaches to taxation – e.g. the six method or administered pricing – directly tackle the possible revenue harms of trade mispricing and can be implemented unilaterally by countries. Where reliable benchmark prices exist in the sector, poor-country governments can use them, alongside profit-sharing arrangements, to counter mispricing of their commodity exports.

Ensure that wider, longer-term solutions actually help poor countries

Ultimately, a much larger paradigm shift is likely needed to solve the inequalities generated by today’s system of global trade and taxation. The profits of global value chains – dominated by multinationals – must eventually be shared in ways that explicitly benefit developing countries. Every effort must be made to ensure that future international tax schemes are structured to help commodity-exporting poor countries.

The role of financial centres and trading hubs like Switzerland

The policies recommended in this brief emphasize actions that can be taken by low-income commodity exporting countries alone or in concert. However, market hubs like Switzerland also have critical responsibilities and should assess the coherency of their current rules concerning illicit financial flows (IFFs). They should consider more stringent regulations, such as extending anti-money-laundering obligations to lawyers, notaries, and fiduciaries; introducing penalties for the professional enablers of tax avoidance schemes; making firms criminally liable when they fail to prevent their agents from facilitating criminal tax evasion; and mandating that taxpayers and intermediaries disclose aggressive cross-border tax deals and automatically exchange relevant information with the countries concerned. Coupled with strengthened whistle-blower protections, such measures will hinder reputational risks and help to hold firms accountable for any abusive or fraudulent arrangements they facilitate. [27, 28]


KEY TERMS

Illicit financial flows are cross-border financial flows that are considered illicit in terms of their origin, cross-border transfer, and/or end use. Examples include money flows resulting from tax evasion, money laundering, bribery, or trade mispricing by institutions or individuals. Broad definitions encompass grey-area practices that may be difficult to prosecute, but nevertheless bend or violate the spirit of the law in certain jurisdictions. Examples include highly exploitative trade terms or aggressive “tax optimization” efforts pursued by multinational firms, which deprive poorer countries of urgently needed revenue for human development and environmental protection.29

Commodities are raw materials or primary agricultural products that can be bought and sold on the market. They include mined/extracted “hard commodities” like oil, gold, and copper, as well as cultivated “soft commodities” like coffee, cocoa, and wheat.30

Trade mispricing refers to trade at distorted prices that are intended to boost company profits and/or deceive tax/customs authorities. It includes misreporting the value, quantity, or nature of traded goods or services (trade misinvoicing). It also includes the manipulation of prices between related companies (transfer mispricing or abusive transfer pricing), such as subsidiaries of the same multinational firm.31

Research on illicit financial flows and trade mispricing

Our research focuses on commodity-trade-related illicit financial flows (IFFs) from resource-rich developing countries. Our project belongs to the “Swiss Programme for Research on Global Issues for Development” (r4d programme) funded jointly by the Swiss Agency for Development and Cooperation (SDC) and the Swiss National Science Foundation (SNSF).

Musselli I, Bürgi Bonanomi E. 2021. Policy Responses to Curb Commodity Trade-related Illicit Financial Flows. R4D-IFF Working Paper Series, No. R4D-IFF-WP02-2021. https://curbingiffsdotorg.files.wordpress.com/2021/06/wp_policies_24062021.pdf

Musselli I. 2019. Curbing Commodity Trade Mispricing: Simplified Methods in Host Countries. R4D-IFF Working Paper Series, No. R4D-IFF-WP08-2019. https://curbingiffsdotorg.files.wordpress.com/2019/08/r4d-iff-wp08-2019.pdf

Musselli I, Bürgi Bonanomi E. 2018. Curbing Illicit Financial Flows in Commodity Trading: Tax Transparency. CDE Working Paper 4. Bern, Switzerland: Centre for Development and Environment (CDE), with Bern Open Publishing (BOP). https://doi.org/10.7892/boris.125884

1 UNECA [United Nations Economic Commission for Africa], AMDC [African Minerals Development Centre]. 2017. Impact of Illicit Financial Flows on Domestic Resource Mobilization: Optimizing Revenues from the Mineral Sector in Africa. Addis Ababa, Ethiopia: UNECA. https://repository.uneca.org/handle/10855/23862

2 See, for example: Ahene-Codjoe A, Alu A, Mehrotra R. 2020. Commodity Trade-related Illicit Financial Flows: Evidence of Abnormal Pricing in Commodity Exports from Ghana. R4D-IFF Working Paper Series, No. R4D-IFF-WP03-2019. https://curbingiffsdotorg.files.wordpress.com/2020/06/r4d_ghana_trademispricing_june2020-1.pdf;

Nolintha V, Sayavong V, Mehrotra R. 2019. Abnormal Pricing in International Commodity Trade: Evidence from Lao P.D.R. R4D-IFF Working Paper Series, No. R4D-IFF-WP02-2019. https://curbingiffsdotorg.files.wordpress.com/2020/03/lao-wp1_trademispricing_june2020.pdf;

Carbonnier G, Mehrotra R. 2019. Abnormal Pricing in International Commodity Trade: Empirical Evidence from Switzerland. R4D-IFF Working Paper Series, No. R4D-IFF-WP01-2019. https://curbingiffsdotorg.files.wordpress.com/2020/06/r4d_wp1_abnormalpricing_june2020.pdf;

Carbonnier G, Mehrotra R. 2020. Abnormal Pricing in Swiss Commodity Imports: Research Findings and Policy Proposals. R4D-IFF Working Paper Series, No. R4D-IFF-WP04-2020. https://curbingiffsdotorg.files.wordpress.com/2020/10/r4d_policy_note_october2020.pdf;

Campodónico H, Rojas A, Valle-Riestra E, Carrera C. 2021. Análisis de exportaciones y valorización de concentrados de zinc para Perú en el periodo 2003 a 2019. R4D-IFF Working Paper Series, No. R4D-IFF-WP03-2021. https://curbingiffsdotorg.files.wordpress.com/2021/06/wp_policies_24062021.pdf;

For more on methodology, see:

Carbonnier G, Mehrotra R. 2018. Trade-related Illicit Financial Flows: Conceptual Framework and Empirical Methods. R4D-IFF Working Paper Series, No. R4D-IFF-WP01-2018. https://curbingiffsdotorg.files.wordpress.com/2019/12/r4d-iff-wp01-2018-dec2019.pdf;

Marur S. 2019. Mirror-Trade Statistics: Lessons and Limitations in Reflecting Trade Misinvoicing. R4D-IFF Working Paper Series, No. R4D-IFF-WP04-2019. https://curbingiffsdotorg.files.wordpress.com/2019/05/r4d-iff-wp04-2019-1.pdf;

3 Global Financial Integrity. 2019. Illicit Financial Flows to and from 148 Developing Countries: 2006–2015. Washington DC, USA: Global Financial Integrity. https://gfintegrity.org/report/2019-iff-update/

4 UNECA, AMDC. 2017. Op. cit.

5 UNCTAD [United Nations Conference on Trade and Development]. 2020. Economic Development in Africa Report 2020: Tackling Illicit Financial Flows for Sustainable Development in Africa. Geneva, Switzerland: United Nations. https://unctad.org/webflyer/economic-development-africa-report-2020

6 UNCTAD [United Nations Conference on Trade and Development]. 2020. Op. cit.

7 UNCTAD [United Nations Conference on Trade and Development]. 2020. Op. cit.

8 Durst MC. 2010. It’s Not Just Academic: The OECD Should Reevaluate Transfer Pricing Laws. Viewpoints. Bristol, UK: Tax Justice Network. https://www.taxjustice.net/cms/upload/pdf/Durst_1001_OECD_-_not_just_academic.pdf;

Picciotto S. 2018. Problems of Transfer Pricing and Possibilities for Simplification. ICTD Working Paper No. 86. Brighton, UK: Institute of Development Studies. https://www.ictd.ac/publication/problems-of-transfer-pricing-and-possibilities-for-simplification;

Hearson M, Ndubaj JW, Randriamanalina T. 2020. The Appropriateness of International Tax Norms to Developing Country Contexts. FACTI Background Paper No. 3. Brighton, UK: International Centre for Tax and Development. https://www.ictd.ac/publication/facti-appropriateness-international-tax-norms-developing-countries/;

Spencer D. 2012. Transfer Pricing: Will the OECD Adjust to Reality? Bristol, UK: Tax Justice Network. https://www.taxjustice.net/cms/upload/pdf/Spencer_120524_OECD_.pdf

9 OECD. 2017. Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations 2017. Paris, France: OECD Publishing. https://www.oecd.org/tax/transfer-pricing/oecd-transfer-pricing-guidelines-for-multinational-enterprises-and-tax-administrations-20769717.htm

10 Musselli I, Bürgi Bonanomi E. 2021. Policy Responses to Curb Commodity Trade-related Illicit Financial Flows. R4D-IFF Working Paper Series, No. R4D-IFF-WP02-2021. https://curbingiffsdotorg.files.wordpress.com/2021/06/wp_policies_24062021.pdf;

Musselli I. 2019. Curbing Commodity Trade Mispricing: Simplified Methods in Host Countries. R4D-IFF Working Paper Series, No. R4D-IFF-WP08-2019. https://curbingiffsdotorg.files.wordpress.com/2019/08/r4d-iff-wp08-2019.pdf;

Norasing N, Musselli I, Bürgi Bonanomi E. 2019. Transfer Mispricing Laws in Context: The Case of Lao PDR. R4D-IFF Working Paper Series, No. R4D-IFF-WP06-2019. https://curbingiffsdotorg.files.wordpress.com/2020/03/r4d-iff-wp06-2019-1.pdf;

Atupare Atudiwe P, Kpebu M, Musselli I, Bürgi Bonanomi E. 2019. Transfer Pricing (TP) Rules, Procedures, and Documentations: A Perspective on Ghana. R4D-IFF Working Paper Series, No. R4D-IFF-WP05-2019. https://curbingiffsdotorg.files.wordpress.com/2020/03/r4d-iff-wp05-2019.pdf;

Baku AWM. 2021. Gold Related Illicit Financial Flow Threats and How to Mitigate Them: The Case of Ghana. R4D-IFF Working Paper Series, No. R4D-IFF-WP01-2021. https://curbingiffsdotorg.files.wordpress.com/2021/04/ghana_goldiffs_ab_220421_ed.pdf

11 See, for example: Indian Customs. 2019. Improving facilitation through the use of electronic seals. WCO News 89:26–29. https://mag.wcoomd.org/magazine/wco-news-89/improving-facilitation-through-the-use-of-electronic-seals/

12 UNECE [United Nations Economic Commission for Europe]. 2020. Trade Facilitation White Paper on Smart Containers: Real-Time Smart Container Data for Supply Chain Excellence, Trade Facilitation White Paper on Smart Containers, No. ECE/TRADE/446. Geneva, Switzerland: United Nations. https://unece.org/trade/publications/trade-facilitation-white-paper-smart-containers-ecetrade446

13 See, for example: Cameroon Customs. 2019. Container Scanning: Analysis of the mechanism’s impact on the customs clearance procedure established in Cameroon. WCO News 89:30–37. https://mag.wcoomd.org/magazine/wco-news-89/container-scanning-analysis-of-the-mechanisms-impact-on-the-customs-clearance-procedure-established-in-cameroon/

14 Ganne E. 2018. Can Blockchain Revolutionize International Trade? Geneva, Switzerland: World Trade Organization. https://www.wto.org/english/res_e/publications_e/blockchainrev18_e.htm;

Brugger F. 2019. Blockchain won’t help with conflict minerals. ETH Zurich Zukunftsblog. https://ethz.ch/en/news-and-events/eth-news/news/2019/04/blog-brugger-blockchain-conflict-minerals.html

15 World Customs Organization. 2016. Guidelines for Strengthening Cooperation and the Exchanging of Information between Customs and Tax Authorities at the National Level. Brussels, Belgium: World Customs Organization. http://www.wcoomd.org/en/topics/facilitation/instrument-and-tools/tools/guidelines-on-customs-tax-cooperation.aspx;

Musselli I, Bürgi Bonanomi E. 2018. Curbing Illicit Financial Flows in Commodity Trading: Tax Transparency. CDE Working Paper 4. Bern, Switzerland: Centre for Development and Environment (CDE), with Bern Open Publishing (BOP). https://doi.org/10.7892/boris.125884

16 Musselli I, Bürgi Bonanomi E. 2018. Op. cit.

17 Picciotto S. 2018. Op. cit.;

United Nations 2017. United Nations Practical Manual on Transfer Pricing for Developing Countries. New York, USA: United Nations. http://www.un.org/esa/ffd/wp-content/uploads/2017/04/Manual-TP-2017.pdf;

Musselli I. 2019. Op. cit.

18 Readhead A. 2017. Special Rules for Commodity Sales: Zambia’s Use of the ‘Sixth Method’. New York, USA: Natural Resource Governance Institute. https://resourcegovernance.org/sites/default/files/documents/special-rules-for-commodity-sales-zambia-sixth-method.pdf;

Grondona V. 2018. Transfer Pricing: Concepts and Practices of the ‘Sixth Method’ in Transfer Pricing. Tax Cooperation Policy Brief No. 2. Geneva, Switzerland: South Centre. https://www.globaltaxjustice.org/sites/default/files/TCPB2_Transfer-Pricing-Concepts-and-Practices-of-the-%E2%80%98Sixth-Method%E2%80%99-in-Transfer-Pricing_EN.pdf;

Solilová V, Nerudová D. 2015. Sixth method as a simplified measurement for SMEs? European Financial and Accounting Journal 10(3):45–61. https://doi.org/10.18267/j.efaj.145;

Teijeiro G. 2014. BEPS Action 10: What TP Sixth Method Are We Talking About? https://www.linkedin.com/pulse/beps-action-10-what-tp-sixth-method-we-talking-guillermo-teijeiro

19 Readhead A. 2018. What Mining Can Learn from Oil: A Study of Special Transfer Pricing Practices in the Oil Sector, and Their Potential Application to Hard Rock Minerals. CGD Policy Paper No. 128. Washington DC, USA: Center for Global Development. https://www.cgdev.org/sites/default/files/what-mining-can-learn-oil-study-special-transfer-pricing-practices-oil-sector.pdf;

Durst MC. 2016. Improving the Performance of Natural Resource Taxation in Developing Countries, ICTD Working Paper 60. Brighton, UK: International Centre for Tax and Development. https://www.ictd.ac/publication/improving-the-performance-of-natural-resource-taxation-in-developing-countries/;

For more on schemes structured as safe harbours, see: Ezenagu A. 2019. Safe Harbour Regimes in Transfer Pricing: An African Perspective. ICTD Working Paper No. 100. Brighton, UK: International Centre for Tax and Development. https://opendocs.ids.ac.uk/opendocs/bitstream/handle/20.500.12413/14620/ICTD_WP100.pdf?sequence=1&isAllowed=y.

20 Löf A, Ericsson M. 2019. Commodity Trading: Understanding the Tax-Related Challenges for Home and Host Countries. Winnipeg, Canada: International Institute for Sustainable Development (IISD). https://www.iisd.org/sites/default/files/publications/commodity-trading-challenges.pdf.

21 United Nations 2017. Op. cit. [Chapter 10.1 Brazil country practices]

22 For an overview, see: Durst MC. 2016. Op. cit.

23 Baku AWM. 2021. Op. cit.;

Readhead A. 2018. Monitoring the Value of Mineral Exports: Policy Options for Governments. GF-OECD Programme to Address BEPS in Mining. Paris, France: International Institute for Sustainable Development (IISD) and Organisation for Economic Co-operation and Development (OECD). https://www.oecd.org/tax/beps/monitoring-the-value-of-mineral-exports-policy-options-for-governments-oecd-igf.htm

24 OECD. 2020. How to Select Buyers of Oil, Gas and Minerals: Guidance for State-Owned Enterprises. OECD Development Policy Tools. Paris, France: OECD. https://www.oecd.org/development/how-to-select-buyers-of-oil-gas-and-minerals-a522e6c0-en.htm

25 Picciotto S. 2016. Taxing Multinational Enterprises as Unitary Firms. International Centre for Tax and Development (ICTD) Working Paper 53. Brighton, UK: Institute of Development Studies. https://www.ictd.ac/publication/taxing-multinational-enterprises-as-unitary-firms/;

Faccio T, Fitzgerald V. 2018. Sharing the corporate tax base: Equitable taxing of multinationals and the choice of formulary apportionment. Transnational Corporations: Investment and Development 25(2):67–89. https://unctad.org/system/files/official-document/diae2018d4_en.pdf#page=77

Faccio T, Picciotto S. 2017. Alternatives to the Separate Entity / Arm’s Length Principle for Taxation of Multinational Enterprises. https://www.icrict.com/s/ICRICT-Alternatives-Eng-Sept-2017.pdf;

Kadet JM, Faccio T, Picciotto S. 2018. Profit-split method: Time for countries to apply a standardized approach. Tax Notes International 91(4):359–362. https://www.ictd.ac/publication/pro%EF%AC%81t-split-method-standardised-approach/;

26 For some insights from a political economy perspective: Brugger F. 2020. Addressing the tax challenges of the digital economy: More of the same? ICTD Blog. https://www.ictd.ac/blog/addressing-tax-challenges-digital-economy-more-same/;

Ndubai J. 2020. If Developing countries are not listened to at the OECD, they will vote with their feet. ICTD Blog. https://www.ictd.ac/blog/developing-countries-oecd-inclusive-framework-consensus/

27 For an overview: Musselli I, Bürgi Bonanomi E. 2021. Op. cit.;

Musselli I, Brugger F, Bürgi Bonanomi E, Giger M, Obrecht A. 2020. Monitoring of Policy Coherence for Sustainable Development in a North South Context. Synthesis Report, Including Application to IFFs. Bern, Switzerland: Centre for Development and Environment (CDE). https://doi.org/10.48350/151532

28 Musselli I, Bürgi Bonanomi E. 2021. Op. cit.;

Musselli I, Brugger F, Bürgi Bonanomi E, Giger M, Obrecht A. 2020. Op. cit.;

Musselli I, Bürgi Bonanomi E. 2018. Op. cit.

29 Global Financial Integrity. N.d. Illicit Financial Flows. Issues. https://gfintegrity.org/issue/illicit-financial-flows/;

Musselli I, Bürgi Bonanomi E. 2019. Illicit Financial Flows: Concepts and Definition. R4D-IFF Working Paper Series, No. R4D-IFF-WP02-2018. https://curbingiffsdotorg.files.wordpress.com/2020/03/r4d_iff_wp02_2020.pdf

30 Musselli I. 2017. Setting the stage: Key concepts and issues. In: Musselli I. Agriculture, Price Stabilisation and Trade Rules: A Principled Approach. The Netherlands: Brill | Nijhoff, pp 20–109. https://bit.ly/3vNdXpv; https://doi.org/10.1163/9789004350540_003

31 Tax Justice Network. N.d. What is transfer pricing? FAQs. https://taxjustice.net/faq/what-is-transfer-pricing/