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Business

Countries snap back at tax haven accusation

Latest update : 2009-04-03

Some countries faulted by the OECD after G20 leaders agreed to crack down on tax havens have disputed the designation, while others said they would endeavour to change their banking legislation. Uruguay has since been removed from the list.

AFP - Countries faulted by the OECD for their tax reporting standards snapped back Friday, with some disputing their designation and others vowing to clear their names.
  
After the Group of 20 nations agreed to crack down on tax havens at a London summit Thursday, the OECD published three lists, one naming four countries it said had not pledged to abide by international tax reporting norms.
  
A second list named territories that had committed to such standards but not yet fully implemented them. A third list identified 40 countries that had substantially implemented the tax standard.
  
The Paris-based Organisation for Economic Cooperation and Development (OECD), which seeks to coordinate the economic polices of its 30 industrialised members, placed the Philippines, Malaysia, Costa Rica and Uruguay on the first list.
  
The second list had 38 names, including European Union members Austria, Belgium and Luxembourg along with Switzerland and Liechtenstein.
  
In reaction, the Philippines insisted it had one of the world's strictest banking secrecy laws and said it was "unfortunate" that it had been designated as having failed to meet OECD criteria.
  
"We are committed to compliance with those standards and we are confident that we will meet the requirements for removal from this list," Cerge Remonde, a spokesman for President Gloria Arroyo, told reporters.
  
Trade Secretary Peter Favila added: "I'm sure the Philippine government would take the necessary steps to ensure that we meet their (OECD) expectations."
  
Malaysia's new Prime Minister Najib Razak said Friday the country should not have been included on the first list as it is committed to global tax standards.
  
"We should not be in that category as -- in practice -- we have been committed to OECD requirements," he said in a statement.
  
In Europe, Luxembourg, Switzerland and Belgium complained of their inclusion on the middle tier -- or "grey" -- list.
  
"I think that the treatment given to some countries is a bit incomprehensible," Luxembourg Prime Minister Jean-Claude Juncker told journalists as he arrived to chair a meeting of eurozone finance ministers in Prague.
  
Juncker renewed criticism of the way the lists were drawn up, noting that several US states with tax-friendly laws were not put on either list.
  
He had said Tuesday that if Luxembourg were placed on any international list of offshore financial centres then Delaware, Nevada and Wyoming should also be named and shamed as tax havens.
  
The Swiss finance ministry issued a statement saying that "President Hans-Rudolf Merz regrets this procedure."
  
"The list does not specify the criteria on the basis of which it was drawn up. Switzerland is not a tax haven," it added, remarking that it was "particularly strange" that Bern was not consulted on drawing up the list even though it is an OECD member.
  
Belgian Finance Minister Didier Reynders said it was not "very pleasant to be on a list that also included tax havens," adding that Belgium could be cleared once it signs agreements on the exchange of financial information with 12 countries.
  
Liechtenstein said meanwhile it hoped to be struck from the middle list.
  
"Our objective is to no longer figure on this grey list," a government spokeswoman told AFP. "We have already begun moving in this direction by starting bilateral discussions with Germany and Britain."
  
Austrian Finance Minister Josef Proell played down Austria's inclusion on the "grey" list and said it did not affect the country's banking secrecy laws.
  
"The talks are over for us because the proof is there on the grey list that we have taken steps in the right direction," he told journalists as he arrived for the meeting with eurozone counterparts.
  
"From Austria's point of view, national banking law will not disturb banking secrecy," he said, adding that planned changes would improve the exchange of tax information with other countries when there is suspicion of wrong-doing.

Date created : 2009-04-03

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