In its meeting in Mexico City on 1-2 September the Global Forum on Transparency and Exchange of Information took several decisions to further curb the use of banking secrecy to protect tax evaders.
In a speech to the Forum OECD Secretary General Angel Gurria hailed the meeting as a breakthrough, stating, ‘what we are witnessing is nothing short of a revolution.
‘By addressing the challenges posed by the dark side of the tax world, the campaign for global tax transparency is in full flow,’ Mr. Gurria said.
‘We have equipped ourselves with the institutional means to continue the campaign. With the crisis, global public opinion’s expectations are high, their tolerance of non-compliance is zero and we must deliver.’
Representatives from 87 jurisdictions and international organisations such as the IMF and World Bank adopted a number of measures to expand the existing system of tax information exchange.
The Global Forum decided to put in place a global monitoring and peer review process to ensure that members implement tax information exchange commitments. It established a Peer Review Group, which will examine the legal and administrative framework as well as the practical implementation of OECD standards in each jurisdiction. The first report by the Peer Review Group on monitoring progress is expected to be issued by the end of 2009.
The Global Forum’s efforts in addressing tax information exchange evolve around bilateral agreements that conform to Article 26 of the OECD’s Model Tax Convention, which creates an obligation for countries to share relevant data for tax enforcement.
The total number of tax agreements doubled with the signing of over 50 new agreements to exchange tax information since the G20 meeting in April.
The G20 summit specifically targeted tax havens and ended with the official communiqué stating that the ‘era of banking secrecy is over’.
The Global Forum also explored ways of speeding up the process of negotiating and concluding information exchange agreements, including new multilateral instruments.
The organisation further put in place a programme to coordinate technical assistance to help smaller jurisdictions implement OECD standards faster.
The Forum also agreed on the need to convene regularly, with the next meeting scheduled for 2010.
The Global Forum’s conclusions were due to be reported to the G20 Finance ministers scheduled to meet in London on 4-5 September and to the meeting of the G20 Leaders Summit in Pittsburgh on 24-25 September.