OECD progress report on tax havens published

The Organisation for Economic
Cooperation and Development released a report on Tuesday on the progress of its
efforts to establish global tax transparency and the effective exchange of information.

Since the G20 summit in April 2009
nearly 300 Tax Information Exchange or Double Taxation Agreements have been
signed, the OECD said in a release.

Of the more than 40 offshore
financial centres that were identified by the OECD in 2000 only five have not
signed any agreements at all, the progress report showed.

The Cayman Islands has signed 13
agreements and is in the process of negotiating additional agreements with a
number of countries including most recently Japan.

Asked whether there was still room
for tax evaders to move funds to havens that have not yet subscribed to
information exchange standards the Head of the OECD’s Tax Centre Jeffrey Owens
said on OECD TV:

“Clearly that is a problem and we
have said right from the outset that this has to be a global solution. It has
to involve all the financial centres, inside the OECD, outside the OECD,
offshore, onsho re, big and small.

“At the end of the day there will
be no places where tax evaders can hide their money,” he said.

After the signing of more than 300
information exchange agreements the focus of the Global Forum on Transparency
and Exchange of Information is now shifting to achieving the effective
implementation of the standards.

“What we now need to do is to get
an effective and global implementation of the agreements,” Mr. Owens said.

“That is why we are now focusing on
peer reviews that will be undertaken by all of the 100 countries that are
covered by the Global Forum and which eventually will lead to conclusions of
whether or not in practice the standards of transparency, the standards of
exchanging information are being consistently, fairly and effectively implemented,”
he explained.

The Cayman Islands is a member of
both the Global Forum’s Steering Group and the Peer Review Group charged with the
development of a methodology and detailed terms of reference for the peer review

In a press briefing Mr. Owens and
the head of the Global Forum Secretariat Pascal Saint-Amans outlined the OECD’s
and the Global Forum’s next steps, including the timing of peer reviews and
“the role of developing countries in the fight against tax havens”.

Mr. Owens estimates that peer
review process will be started in March of this year. The first stage of
implementing the legislative framework can probably be completed within 18
months, he stated.

The second phase of the review,
which is the actual monitoring of the practical application, will take longer.

“Our goal is to have reviewed by
2014 all of the countries and financial centres,’ Mr. Owens said.

The issue will be followed up by
the organisation in a series of meetings. On 25 January the OECD will launch
its Fiscal Initiative for Latin America. On 26 and 27 January the OECD’s
Committee on Fiscal Affairs is going to review the progress of the project and
on 28 January the Global Forum on Development will debate how developing
countries can benefit from tax transparency.