Apr 06 2009 Brett Wolf
Just hours after G-20 leaders declared that the era of banking secrecy had ended, the Organisation of Economic Cooperation and Development named and shamed four non-cooperative "tax havens." According to the OECD's so-called "progress report," the Philippines, Uruguay, Costa Rica and the Malaysian territory of Labuan "have not committed to the internationally agreed tax standard."
This OECD report was released on Thursday even as French President Nicholas Sarkozy's remark that "the time of banking secrecy has passed" was still reverberating around the world.
Jurisdictions 'gray listed'
Dozens of countries – including Switzerland and Liechtenstein – avoided being blacklisted by declaring their commitment to adhering to "the internationally agreed tax standard." The Chinese government reportedly used its clout to prevent the blacklisting of two territories – Hong Kong and Macau.
The "internationally agreed tax standard" was developed by the OECD and endorsed by G-20 leaders during their 2004 meeting in Berlin. It requires exchange of information "on request" in all tax matters for the administration and enforcement of domestic tax law without regard to bank secrecy. It also provides for extensive safeguards to protect the confidentiality of the information exchanged.
The G-20 reportedly has asked the OECD to report back on tax haven cooperation prior to November, and stated that sanctions may be imposed on those who have not complied by then.
It is hoped that this standard will not only aid authorities in combating tax evasion, but also pull back the veil of bank secrecy that allows corrupt leaders and laundrymen to hide their ill-gotten gains.
