OECD Meeting Passes Uneventfully

by Ulrika Lomas, Tax-News,com, Brussels

11 June 2004

The Organisation for Economic Cooperation and Development's recent Global Forum on Taxation, held in Berlin on June 3-4 appears to have passed relatively uneventfully, according to reports in the international media.

The Global Forum brought together representatives of 44 OECD and non-OECD governments to discuss proposals developed jointly by representatives from Australia, the Bahamas, the Cayman Islands, France, Germany, Isle of Man, Japan, Jersey, Mauritius, Panama, Samoa, St. Kitts and Nevis, Seychelles and the United States.

According to the OECD, the process agreed by the Global Forum participants consists of individual, bilateral and collective actions:

• Individual actions. Some countries and jurisdictions may need to modify existing laws and practices to meet the high transparency and information exchange standards that the Global Forum participants wish to see achieved. In addition, participants will explore what their governments can do to promote the adoption of transparency and exchange of information by those not yet in the process. This would include pursuing these issues in other groups or organisations of which they are members.
• Bilateral actions. Participants are encouraged to continue to strive to achieve effective exchange of information and transparency by 2006. Nevertheless, it is recognised that flexibility is required since many participants have not yet initiated negotiations of the bilateral agreements required. Further, countries may wish to depart from the 2006 date where it is in their mutual interest.
• Collective actions. The participants agreed to: Carry out a review of the transparency and information exchange practices currently applied by financial centres (including all OECD countries, the 33 Non-OECD Participating Partners and significant financial centres that are not yet part of the Global Forum process), and engage in a dialogue with significant financial centres that are not currently participating in this work. Other financial centres, including the 5 jurisdictions currently on the OECD List of Unco-operative Tax Havens, will be invited to participate in the work towards a level playing field. This will help to shift the process from one of listing to one that is more voluntary, inclusive and participatory.

In a statement released following the conclusion of the meeting, the OECD announced that:

"The Global Forum participants welcomed the constructive nature of the discussions in Berlin and looked forward to working with financial centres which have not yet participated in this dialogue. They expressed confidence that a more inclusive discussion will lead to the achievement of the common goal of promoting fair tax competition in the area of financial services."

Critics of the multilateral organisation put a less positive slant on the meeting, however, suggesting that the OECD had failed to make any concrete progress in its stated goal to eliminate "harmful tax competition".

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