The OECD welcomed these new commitments, which include undertakings in favour of transparency, non-discrimination and effective co-operation, and said it looked forward to working with the jurisdictions to ensure their implementation.

The Isle of Man also welcomed the decision, but said its commitment was conditional on OECD members, including Switzerland and Luxembourg, observing the same standards of transparency as those demanded of the havens. "If they don't do as they're supposed to, our commitment will cease," said John Cashen, chief financial officer at the Isle of Man treasury.

Switzerland and Luxembourg, which were the only two OECD members who refused to sign a declaration on banking secrecy in 1999, are key both to the OECD's transparency crusade, but also to the EU's unfolding withholding tax drama. The information-sharing regime (the practical expression of 'transparency') which was agreed at the Feira summit six months ago, and elaborated in late November by the EU's ECOFIN council, is supposed to become definite for all 15 member states at the end of 2002, by when the key offshore jurisdictions such as Switzerland and indeed the Isle of Man, along with the United States and other major OECD jurisdictions are supposed to have agreed to match the EU on information sharing.

2002 (the EU's deadline) is well before 2005 (the OECD's deadline), but can always be changed. Switzerland's immediate response to the EU November deal was to reiterate its rooted objections to information sharing, while offering to strengthen its withholding tax regime. The attitude of the United States may be crucial: an attempt by the outgoing Democratic administration two years ago to breach domestic banking secrecy was defeated in Congress after a massive public outcry which saw 250,000 letters being written in protest, and it seems unlikely that a Bush administration would attempt to re-introduce it.

On the contrary, House Republican leader Dick Armey very publicly told Treasury secretary Larry Summers to have no part in the OECD's campaign against offshore jurisdictions accused of 'unfair' tax competition. Said Dick Armey: 'The financial protectionism that the OECD wants to impose against low-tax regimes is against our national interests and would also endanger the economies of other nations.'

That being said, it's also true that the US has pressed ahead with the installation of the IRS's 'Qualified Intermediary' programme, which has the effect of imposing transparency on foreign financial institutions as far as their US clients are concerned, although it doesn't impact on foreigners.

The OECD said that both the Netherlands Antilles and the Isle of Man will be invited to participate in the next meeting of the OECD’s Global Forum on Taxation in March 2001, at which there will be a discussion of how to design and implement the effective exchange of information agreements.

The OECD has also confirmed two further regional conferences focussed on harmful tax practices, the first in Barbados on 8-9 January 2001. The meeting, hosted by the Government of Barbados, is being jointly organised with the Commonwealth Secretariat. A second regional conference is planned to take place in Tokyo in February.