Parts of Norfund’s investment activity are by necessity made through OFCs, or so-called tax havens. This puts a special responsibility on us to ensure that we have full knowledge of all transactions made, so as not to be complicit in tax evasion or illegal flows of capital. In cooperation with the Ministry of Foreign Affairs, Norfund has worked actively to achieve more transparency of the international flows of capital that pass through the OFCs, and to establish a common set of regulations of when and how the DFIs can use such jurisdictions.

In the short term, Norfund refrains from using OFCs that are located outside the OECD area and with which Norway does not have taxation or information exchange agreements. In the case of funds where Norfund has not taken a leading role in the establishment, jurisdiction has been moved to the OECD. Restrictions on the use of OFCs have caused Norfund to make fewer fund investments in Africa than planned and to increase the number of loans.

In 2009 Norfund implemented an initiative targeting our European sister organizations in the association The European Development Finance Institutions (EDFI) for developing a common policy with regard to the use of overseas finance centres (OFCs) by the development finance institutions (DFIs).

In June 2008, the Norwegian government appointed an official Commission to learn more about tax havens and how they damage developing countries. The Commission also looked at Norway’s role with regard to the use of tax havens, particularly through the activities of Norfund. The Norwegian Minister of the Environment and International Development received on 18 June 2009 the commission’s report: NOU 2009:19 Tax havens and development - Status, analyses and measures. Following the report Norfund provided two in-depth consultation statements, on 2 September (only available in Norwegian) and 30 October respectively.