January 19 2010 OECD hails tax haven crackdown
(AFP) - Tax havens signed more than 300 agreements promising to exchange information last year in “one of the big success stories of the G20”, the Paris-based Organisation for Economic Co-operation and Development said on Tuesday.
The number of agreements “skyrocketed” in the run-up to a London summit last April summit, at which G20 leaders agreed to “stand ready to deploy sanctions” against non-co-operative jurisdictions.
The concerted political drive against tax secrecy, which was prompted by evasion scandals and the global financial crisis, meant more progress was made in 2009 than in the past decade, said the OECD. Before the G20 Washington Summit in November 2008, only 44 tax information exchange agreements had been signed.
Only eight jurisdictions – Belize, Liberia, Nauru, Niue, Panama, Vanuatu, Guatemala and Philippines – have yet to sign any agreements. But Jeffrey Owens, director of its tax policy centre, said he expected the “vast majority” of these countries to have at least one agreement by March, highlighting current efforts by Guatemala, Philippines and Panama to negotiate.
Sanctions against uncooperative jurisdictions might be co-ordinated by the Group of 20 leading economies or G8 but were a matter for domestic legislation, according to the OECD, which pointed out that certain countries including France and Australia had already put in place legislation for “defensive measures”. But a joint decision would be needed on the question of whether multilateral institutions could invest in non-cooperative jurisdictions, it said.
A total of 19 jurisdictions have made the transition from the “grey” list to the top category deemed to have “substantially implemented” the tax transparency standard by signing at least 12 agreements on exchanging tax information. Mr Owens said this category did not represent a “white list” because there was a widespread desire to move beyond 12 agreements and a need to ensure agreements were implemented.
As well as 195 tax information exchange agreements signed last year, 110 double tax conventions were upgraded. Only 13 per cent of agreements had been signed between offshore jurisdictions, said the OECD in a response to criticism of the relevance of some of deals such as those struck by Monaco with Liechtenstein, Andorra and the Bahamas.
Mr Owens said Hong Kong and Macao, along with Singapore, had “kept their promises”, by putting in new legislation by the end of 2009 and actively negotiating agreements. The two administrative regions are referred to in a footnote in the OECD progress report after China insisted they were were excluded from a grey list of tax havens at last year’s London Summit.
Emerging economies, notably Argentina, China, India and South Africa are also negotiating tax information exchange agreements, according to the OECD, which is keen to extend the benefits of more tax transparency to developing countries. Mr Owens estimated that illicit flows out of developing countries were between double and four times the flow of aid.
He said he was keen to ensure that emerging countries meet the tax transparency standards. “The last thing Africa needs is tax havens within the centre of Africa.” The OECD has written to the finance minister of Ghana, which has been trying to move into offshore finance, warning of the risks of a failure to comply with international standards.
The difficulty of ensuring that jurisdictions implement the agreements will be addressed by a three-year long peer review process involving 91 countries, including all G20 members, all OECD countries and all offshore jurisdictions. The peer review group is chaired by France with vice-chairs from India, Japan, Singapore and Jersey.
The peer review process is expected to allow critics an opportunity to voice concerns about other controversial aspects of tax systems including trusts and the anonymous accounts available in some US states such as Delaware.
Mr Owens said he was disappointed that Switzerland suspended a tax accord with France, after a row over the French use of data stolen from a Swiss branch of HSBC, the international bank. But he said it did not represent a change of policy on the part of Switzerland which has made “significant progress”.
(AFP) - Tax havens signed more than 300 agreements promising to exchange information last year in “one of the big success stories of the G20”, the Paris-based Organisation for Economic Co-operation and Development said on Tuesday.
The number of agreements “skyrocketed” in the run-up to a London summit last April summit, at which G20 leaders agreed to “stand ready to deploy sanctions” against non-co-operative jurisdictions.
The concerted political drive against tax secrecy, which was prompted by evasion scandals and the global financial crisis, meant more progress was made in 2009 than in the past decade, said the OECD. Before the G20 Washington Summit in November 2008, only 44 tax information exchange agreements had been signed.
Only eight jurisdictions – Belize, Liberia, Nauru, Niue, Panama, Vanuatu, Guatemala and Philippines – have yet to sign any agreements. But Jeffrey Owens, director of its tax policy centre, said he expected the “vast majority” of these countries to have at least one agreement by March, highlighting current efforts by Guatemala, Philippines and Panama to negotiate.
Sanctions against uncooperative jurisdictions might be co-ordinated by the Group of 20 leading economies or G8 but were a matter for domestic legislation, according to the OECD, which pointed out that certain countries including France and Australia had already put in place legislation for “defensive measures”. But a joint decision would be needed on the question of whether multilateral institutions could invest in non-cooperative jurisdictions, it said.
A total of 19 jurisdictions have made the transition from the “grey” list to the top category deemed to have “substantially implemented” the tax transparency standard by signing at least 12 agreements on exchanging tax information. Mr Owens said this category did not represent a “white list” because there was a widespread desire to move beyond 12 agreements and a need to ensure agreements were implemented.
As well as 195 tax information exchange agreements signed last year, 110 double tax conventions were upgraded. Only 13 per cent of agreements had been signed between offshore jurisdictions, said the OECD in a response to criticism of the relevance of some of deals such as those struck by Monaco with Liechtenstein, Andorra and the Bahamas.
Mr Owens said Hong Kong and Macao, along with Singapore, had “kept their promises”, by putting in new legislation by the end of 2009 and actively negotiating agreements. The two administrative regions are referred to in a footnote in the OECD progress report after China insisted they were were excluded from a grey list of tax havens at last year’s London Summit.
Emerging economies, notably Argentina, China, India and South Africa are also negotiating tax information exchange agreements, according to the OECD, which is keen to extend the benefits of more tax transparency to developing countries. Mr Owens estimated that illicit flows out of developing countries were between double and four times the flow of aid.
He said he was keen to ensure that emerging countries meet the tax transparency standards. “The last thing Africa needs is tax havens within the centre of Africa.” The OECD has written to the finance minister of Ghana, which has been trying to move into offshore finance, warning of the risks of a failure to comply with international standards.
The difficulty of ensuring that jurisdictions implement the agreements will be addressed by a three-year long peer review process involving 91 countries, including all G20 members, all OECD countries and all offshore jurisdictions. The peer review group is chaired by France with vice-chairs from India, Japan, Singapore and Jersey.
The peer review process is expected to allow critics an opportunity to voice concerns about other controversial aspects of tax systems including trusts and the anonymous accounts available in some US states such as Delaware.
Mr Owens said he was disappointed that Switzerland suspended a tax accord with France, after a row over the French use of data stolen from a Swiss branch of HSBC, the international bank. But he said it did not represent a change of policy on the part of Switzerland which has made “significant progress”.
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**OECD Transparency and International Cooperation in Tax Matters
