4 tax havens blacklisted

April 3, 2009

4 tax havens blacklisted

Singapore is placed on the 'grey list', along with Switzerland

'We have agreed that there will be an end to tax havens that do not transfer information upon request,' said British Prime Minister Gordon Brown at the end of the G20 summit. -- PHOTO: AGENCE FRANCE-PRESSE

LONDON - FOUR nations were blacklisted as uncooperative tax havens on Thursday after G-20 leaders declared the age of banking secrecy was over and said they would no longer tolerate shady havens draining away badly needed tax revenue.

At the request of the Group of 20 summit of rich and developing nations, the Organisation for Economic Cooperation and Development named the Philippines, Uruguay, Costa Rica and the Malaysian territory of Labuan as the worst offenders, saying they had refused to adopt new rules on financial openness.

Leaders also said nations that refuse to exchange tax information could in the future face tough sanctions - including the withdrawal of financing by the World Bank or International Monetary Fund. 'The time of banking secrecy has passed,' French President Nicholas Sarkozy said following the summit. 'Everyone around the table wants an end to tax havens. Everyone knows we need sanctions.'

The announcement reflects mounting concern that banking secrecy in tax havens has helped to worsen the economic crisis by disguising the true value of some global assets. Anti-poverty activists say such places provide corrupt officials places to stash illicit funds, often depriving poor nations of needed resources.

The OECD has divided countries into three categories: those who comply with rules on sharing tax information, those who say they will but have yet to act and nations which have not yet agreed to change banking secrecy practices.

Switzerland and Liechtenstein, which both have strong banking secrecy traditions, said last month they would adopt international rules on tax cooperation and were ready to comply with G-20 demands. Liechtenstein, Switzerland's tiny Alpine neighbour, said it has already met with British officials to prepare for the new standards. Monaco said earlier that it would be more transparent with foreign tax authorities.

In return they were spared the fate of being blacklisted but were left in a gray area of countries that still have to implement their commitment to accept new information-exchange standards.

The other on the grey list include Belgium, Brunei, Chile, the Dutch Antilles, Gibraltar, Liechtenstein, Luxembourg, Monaco, Singapore and Carribean island nations including the Bahamas, Bermuda and the Cayman Islands.

A third list of the countries named those that had substantially implemented the internationally agreed tax standard. It included Britain, China (with the exception of special administrative regions), France, Germany, Russia and the United States. -- AP, AFP

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