Guernsey Finds Support In Washington

by Robert Lee, Tax-News.com, London

17 May 2010

Guernsey’s Chief Minister, Lyndon Trott, has been reinforcing the island’s position as a leader in tax transparency during meetings with leading officials in Washington.

Trott recently met with Michael Mundaca, Assistant Secretary of the US Treasury Department, to discuss the continuing cooperative efforts of the two jurisdictions on tax transparency and information exchange.

Appointed by President Barack Obama in March 2010, Mundaca is the senior executive officer in the US government responsible for tax policy. The meeting was designed to build on similar meetings between the two jurisdictions that began almost a decade ago and produced Guernsey’s first-ever Tax Information Exchange Agreement (TIEA) in 2002.

Mundaca observed that in the year since Guernsey was placed on the Organization for Economic Cooperation and Development (OECD) white list for meeting internationally agreed tax standards, many jurisdictions have been trying to catch up by signing TIEAs. Mundaca predicted that Guernsey will again stand out positively as the OECD’s Peer Review Group evaluates countries that have implemented the internationally agreed tax standard.

Commenting after his meeting with Mundaca, Trott said: “I am delighted that the Secretary recognizes and praises Guernsey’s role as a leader in the implementation of international standards on tax transparency and information exchange. We have an excellent relationship with the United States which I believe will continue to grow and flourish during the coming years.”

Mundaca reiterated his aversion to using outdated lists to blacklist jurisdictions in US legislation and noted that the inclusion of Guernsey on such lists demonstrates their unreliability. The US Congress recently enacted offshore tax enforcement legislation that does not use a blacklist approach.

The meeting with Mundaca followed talks with Robert Roach of the Senate Permanent Subcommittee on Investigations, commonly referred to as the ‘PSI’.

The PSI conducts extensive investigations and hearings on the business practices of corporations and their compliance with US regulations, laws, tax and accounting policies and ethics. The Chairman of the PSI, Senator Carl Levin, has held the top position on the PSI for more than 10 years and is the lead sponsor of the 'Stop Tax Haven Abuse Act.'

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