The case of the disappearing tax havens
Within five days, the blacklist was declared empty. Countries had been able to get off the blacklist simply by promising to co-operate with the OECD's hopelessly inadequate standards. Eurodad explores the issue here. As they noted:
"It is worrying that while the G20 have called for sanctions against tax havens, none has been announced yet. Paradoxically it is rather the other way round: tax havens seem to be dictating the way the OECD should operate."We would tend to concur. The OECD has now produced a new, squeakier-clean tax haven list. The blacklist remains empty. The 38 has been reduced to just nine. These nine represent, according to IMF data, less than two percent of total trade in cross-border financial services. John Christensen, TJN's director, said:
"This tells us that the OECD have now given carte blanche - that is, white-list treatment - to 98 percent of the global market in offshore financial services. Are they really trying to tell us that the offshore problem is almost solved?"Now get this. The G20 originally declared a vague intention to apply sanctions to jurisdictions that did not co-operate. Presumably this referred to the blacklist, but we would argue that a far broader set of jurisdictions deserve sanctions. Anyone for Panama?
And what does the OECD now say about sanctions?
"Neither the Global Forum nor the OECD has the power to impose sanctions on countries that do not implement the standards. Individual countries whether OECD or non‐ OECD will decide for themselves what actions they consider necessary to ensure the effective enforcement of their tax laws. The G20 has produced a list of potential measures based upon an analysis provided by the OECD."
In other words, sauve qui peut. Or, more prosaically, business as usual.