PARIS, France --- They've found themselves off the Organisation for Economic Cooperation and Development (OECD) tax haven list for now, but some of the region's countries aren't completely off the OECD radar. According to the list published following the G20 Summit, there's a literal grey area where 16 Caribbean counties fall, requiring them to take further action that would put them totally in the clear.
Barbados and the United States Virgin Islands are the only two Caribbean countries on the OECD white list which gives credit to 40 jurisdictions that "have substantially implemented the internationally agreed tax standard".
On the grey list of 30 tax havens that have committed to the internationally agreed tax standard - some with agreements from as far back as 2000 - but have not yet substantially implemented it are Anguilla, Antigua and Barbuda, Aruba, the Bahamas, Belize, Bermuda, the British Virgin Islands, the Cayman Islands, Dominica, Grenada, Montserrat, the Netherlands Antilles, St Kitts and Nevis, St Lucia, St Vincent and the Grenadines, and the Turks and Caicos Islands.
"Many of these commitments will require legislative changes and the negotiation of specific bilateral agreements in order to become effective, and the OECD stands ready to assist jurisdictions in their implementation," a statement issued by the Paris-based organisation said.The OECD also says it is reviewing legislation which the Cayman Islands recently enacted that allows that country to exchange information unilate rally and identifies 11 countries with which it is prepared to do so.
According to the OECD document, the internationally agreed tax standard requires exchange of information on request in all tax matters for the administration and enforcement of domestic tax law without regard to a domestic tax interest requirement or bank secrecy for tax purposes. It also provides for extensive safeguards to protect the confidentiality of the information exchanged.
Costa Rica, Malaysia, the Philippines and Uruguay are the only four blacklisted countries.
The OECD report on progress by financial centres in implementing the high tax standards was released just after leaders of the world's largest economies, at their G20 Summit in London, agreed on tough standards for financial regulation and punishment for those who fail to comply.
"We agree...to take action against non-cooperative jurisdictions, including tax havens. We stand ready to deploy sanctions to protect our public finances and financial systems. The era of banking secrecy is over," a communiqué issued after the meeting stated.In welcoming the outcome of the Summit, OECD Secretary General Angel Gurria said "recent developments reinforce the status of the OECD standard as the international benchmark and represent significant steps towards a level playing field".
"We now have an ambitious agenda that the OECD is well placed to deliver on. I am confident that we can turn these new commitments into concrete actions to strengthen the integrity and transparency of the financial system," he added.
The OECD has outlined its challenges ahead as achieving a rapid and effective implementation of the international tax standard, speeding up the negotiations of tax information exchange agreements and extending the scope and role of the organisation's action.In addition to agreeing on stricter financial rules, the G20 Summit reached agreements to provide a US$1.1 trillion programme of support to restore credit, growth and jobs in the world economy.
That includes trebling resources available to the International Monetary Fund (IMF) to US$750 billion, supporting a new allocation of US$250 billion, and providing at least US$100 billion of additional lending by the multilateral development banks to ensure a total of US$250 billion of support for trade finance.The leaders also agreed to use the additional resources from agreed IMF gold sales for concessional finance for the poorest countries.
"Together with the measures we have each taken nationally, this constitutes a global plan for recovery on an unprecedented scale," the G20 communiqué said.