Financial Transparency Coalition

A couple of days ago I highlighted a report from Cayman about a meeting of offshore lawyers where it seemed there was widespread agreement that the system of tax information exchange agreements that the OECD, UK government and tax haven authorities say delivers secrecy in the murky world of secrecy jurisdictions really does not such thing.

Cayman News Service has blown the lid on one of the biggest lies of recent years about tax havens / secrecy jurisdiction. It’s been claimed since 2009 that tax information exchange agreements – promoted by the Organisation for Economic Cooperation and Development as the way to tackle tax haven abuse – mean that tax havens are now ‘open and transparent places’.

WASHINGTON, DC – The U.S. Treasury Department is finalizing a regulation (REG-146097-09) that would require that the interest earned on the U.S. bank accounts of non-resident aliens be reported to the Internal Revenue Service (IRS), as is currently required for U.S. citizens. The proposed IRS regulation has been touted as an important tool in the fight against international tax evasion, money laundering, drug trafficking, corruption, and terrorist financing. However, a small group of legislators have introduced a bill (H.R. 2568) that would prevent the Treasury from taking such action.

As far as international tax cooperation goes, the OECD is the organization that holds the cards. Or at least it does when it comes to the standards by which countries exchange information for tax purposes. According to OECD guidelines, countries which have negotiated bilateral Tax Information Exchange Agreements (TIEAs) exchange of information for tax purposes on request when it is "foreseeably relevant." The OECD also maintains a gray list of so-called “tax havens;” jurisdictions with a lack of transparency that have signed fewer than twelve TIEAs. The jurisdictions which reach that threshold are removed from...