The OECD Global Forum: the list
We now have a new tax haven list entitled "A Progress Report on the Jurisdictions Surveyed by the OECD Global Forum in Implementing the Internationally Agreed Tax Standard."
Great strides have been taken on tax havens in the last couple of days - although this particular list is deeply flawed.
It looks like a white list ("Jurisdictions that have substantially implemented the internationally agreed tax standard" - including the UK, the US, Jersey, Guernsey and so on), a grey list, ("Jurisdictions that have committed to the internationally agreed tax standard, but have not yet substantially implemented", mostly small and often dirty tax havens like Cayman) a murky list ("Other Financial Centres," including Luxembourg, Switzerland and Singapore,) and a black list ("Jurisdictions that have not committed to the internationally agreed tax standard"), including Costa Rica, Labuan (Malaysia), Philippines and Uruguay.) The actual OECD criteria are available here.
A supporting note issued by the G20 contains this:
"We stand ready to take agreed action against those jurisdictions which do not meet international standards in relation to tax transparency. To this end we have agreed to develop a toolbox of effective counter measures for countries to consider."
Read the note here.
Overall, remarkable progress, and some real disappointments.
Note that Hong Kong and Macau, two very unpleasant and secretive receptacles for criminal and other dirty money, have been wiped off the list (though there is an oblique reference to special administrative regions.) China is behind that, and it now appears to have nailed its colours firmly to the mast as a friend of dirty money. London, Wall Street, Jersey and so on should not be on anybody's white list. Look here, for example. Or here. Just as China has protected its havens, London has clearly protected its own Crown Dependencies. As one e-mail to TJN just put it:
"Maybe we should describe the UK Crown Dependencies as Special Administrative Regions? One Country Two Systems?"
The lists will rely strongly jurisdictions signing sufficient of what are called Tax Information Exchange Agreements (TIEAs). TJN will very soon produce a draft briefing document looking at these in more detail. Watch this space.
Great strides have been taken on tax havens in the last couple of days - although this particular list is deeply flawed.
It looks like a white list ("Jurisdictions that have substantially implemented the internationally agreed tax standard" - including the UK, the US, Jersey, Guernsey and so on), a grey list, ("Jurisdictions that have committed to the internationally agreed tax standard, but have not yet substantially implemented", mostly small and often dirty tax havens like Cayman) a murky list ("Other Financial Centres," including Luxembourg, Switzerland and Singapore,) and a black list ("Jurisdictions that have not committed to the internationally agreed tax standard"), including Costa Rica, Labuan (Malaysia), Philippines and Uruguay.) The actual OECD criteria are available here.
A supporting note issued by the G20 contains this:
"We stand ready to take agreed action against those jurisdictions which do not meet international standards in relation to tax transparency. To this end we have agreed to develop a toolbox of effective counter measures for countries to consider."
Read the note here.
Overall, remarkable progress, and some real disappointments.
Note that Hong Kong and Macau, two very unpleasant and secretive receptacles for criminal and other dirty money, have been wiped off the list (though there is an oblique reference to special administrative regions.) China is behind that, and it now appears to have nailed its colours firmly to the mast as a friend of dirty money. London, Wall Street, Jersey and so on should not be on anybody's white list. Look here, for example. Or here. Just as China has protected its havens, London has clearly protected its own Crown Dependencies. As one e-mail to TJN just put it:
"Maybe we should describe the UK Crown Dependencies as Special Administrative Regions? One Country Two Systems?"
The lists will rely strongly jurisdictions signing sufficient of what are called Tax Information Exchange Agreements (TIEAs). TJN will very soon produce a draft briefing document looking at these in more detail. Watch this space.
posted by TJN at 12:26 am
2 Comments:
Will Tax Justice Network now be pushing for international efforts to help the small tax haven countries to restructure their economies to be less dependent on the offshore industry, as you have said on your homepage?
Re the OECD "list revival," Hong Kong and Macao SARs are implicitly in group two. (China also regards Taiwan, a nice place to park $$, as an SAR but unfortunately the Taiwanese do not agree). For those who take this list game seriously, I believe we're still missing anjouan/moheli, dubai,estonia,palua, tonga, tunisia, lebanon, paraguay, and the seychelles, as well as the four "not committed," costa rica (a favorite of russians), uruguay (my own personal favorite because of the resorts), labuan, and manilla (where I just was last week).
For what it is worth, the husband of the current President of the Philippines is rumored to favor Austria and HK over his own "noncommitted" country. Hypoverein Bank, in particular. Under the OECD scheme, presumably the Philippine Gov would be entitled to (a) charge its own President' husband with tax evasion (b) get a connviction (c) ask the Austrian gov to ask for assistance.....etc. etc. etc. By which time whatever $ was held in the name of XYZ corp will be long gone...
Prediction: the amount of additional recaptured lost tax revenue ultimately produced by this scheme will be about on the same scale as "debt relief" -- less than $1 billion per year - gross of the huge transactions costs for implementing and monitoring this costly n-way, after the fact enforcement scheme.
As a lawyer, I'm of course fascinated and delighted at the potential windfall for brethren tax lawyers. But as an economist, should we not emphasize the dubious ECONOMICS of all this legerdemain?
Would it not have been simpler and more productive for ther G20 to call for all these participating havens to commit to levying a 1% annual witholding tax on all financial assets not held in the names of beneficial owners? (...an "anonymity" tax, as proposed by the late yale prof carlos alejandro way back in 1976). That would at least generate some real revenue for development assistance.
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