G7 Ministers Confirm OECD Proposals

by Ulrika Lomas, Tax-News.com, Brussels

10 July 2001

G7 Finance Ministers announced last week that the OECD would be pushing back the deadline for offshore financial centres to commit to reforms from July 31st until November 30th. The Organisation for Economic Cooperation and Development has not been able to make the announcement itself thus far, due to some (fairly one-sided) wrangling between Spain and the United Kingdom over the status of Gibraltar.

The Spanish ambassador to the OECD has said that she will veto the agreement, which is now focussed primarily on information exchange as opposed to tax harmonisation, unless the UK agrees to take responsibility for the eradication of harmful tax practices in Gibraltar. However, the UK Treasury has made it clear that they are keeping out it, and has said that a unilateral response from them is not necessary.

In their statement, in addition to confirming the OECD proposals, the G7 ministers also promised that the OECD would not impose sanctions on any of the offshore jurisdictions any sooner than they would on their own member countries. US Treasury Secretary Paul O' Neill commented on the proceedings on Friday. 'I am very pleased that we have established a consensus on redirecting the OECD harmful tax practices project to focus exclusively on information exchange, and treat non-member countries and member countries in the same timeline,' he said.

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