Great PR for tax havens, but lousy policy
But as TJN's Jack Blum rightly comments in the article, "it remains to be seen if Liechtenstein will really provide the key information that tax authorities need, such as the identity of the person opening the account or its beneficiary."
"Say I'm the trustee of trust in Jersey in the Channel Islands, and I want to open an account for a client in Liechtenstein," says Blum. "Does Liechtenstein know who my client is?"
This is, of course, a fundamental weakness (and not the only one) of the already timid agenda being pushed by the G-20 countries. Secrecy jurisdictions across the globe are climbing over one another in the general scramble to sign up to the OECD's threshold number of tax information exchange agreements. Trouble is, these agreements are just unfit for purpose, not least because the OECD hasn't adequately stipulated exactly what information must be obtained to make the information exchange process effective.
And as the WSJ notes, the problems don't stop there:
The problem with TIEAs in general, according to critics, is that they require a country that requests information to know who they are looking for from the start. That means that they aren't good for discovering tax cheats.
"It's great PR for the tax havens, but still lousy policy," says Blum.