Spain Blocks OECD Offshore Centre Deal Over Gibraltar Row

Panorama

03 July 2001

This story is reproduced by kind permission of Panorama at: http://www.panorama.gi

The OECD have agreed to extend the deadline by which a list of 32 jurisdictions are required to give a commitment that they will eradicate so-called harmful taxes derived from their offshore 'tax haven' status - but Spain is blocking it amidst a row over Gibraltar.

The OECD had given a deadline to 30 June 2001 for compliance, but at a meeting this week in Paris it was agreed to extend this deadline to 30 November.

One of the territories on the OECD list is Gibraltar, where its government has been considering what action to take.

However, the Spanish government has now come up with its standard objection that it does not recognise the Gibraltar government as a competent authority to take a decision. Instead, it wants Britain to take the decision.

Gibraltar's offshore status, like that of other overseas territories, is the responsibility of its fiscal authorities as Gibraltar is not part of the UK. Since the OECD deadline was first determined, the Gibraltar government has been having discussions with the OECD - as have other overseas territories.

But this week's OECD meeting blew up into a battle-ground as the Spanish ambassador, Elena Pisonero, threatened with blocking the accord.

Spain is blocking it purely to further its claim to the sovereignty of Gibraltar, and it is thus a political act and not one centred on the elimination of certain fiscal practices. "It is threatening an agreement that has been difficult to reach," said a source.

Engulfed in the OECD plans is the latter-day attitude of the US administration, which has become lukewarm to the OECD ideas since Bush won the US election

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