French Prime Minister Fran?ÃŸois Fillon said in parliament yesterday that he wants tax havens. or "black holes" as he calls them, to "disappear" as a first step towards reforming the international financial architecture.
This is just as we have argued: undermining the regulatory and tax systems of other nation states is the very raison d'?â„¢tre of the secrecy jurisdictions.
This follows a statement by French budget minister Eric Woerth on September 29 that he intended to organise a meeting of OECD nations to "relaunch the fight against tax havens" in October or November. It seems to have cross-party support. Segol?®ne Royale, the Socialist who lost to Nicolas Sarkozy in the presidential elections last year, supports an attack on tax havens; Arnaud de Montebourg, a parliamentarian who has long studied the phenomenon, outlined in a press release yesterday some measures that need to be taken. Loosely translated, his points are:
- Banish bank secrecy.
- Suppressing tax havens means suppressing beggar-thy-neighbour tax policies on capital which serve as tools to attract our capital to dubious destinations.
- Break the secrecy associated with trusts, Andstalts, or fiducies (a French equivalent to trusts) which block judicial and fiscal co-operation with our own authorities.
- We should require the application of the same prudential banking norms that we demand from our own banking establishments.
- Violation of all these requirements could be sanctioned in various ways, including by interdiction and embargoes on financial transactions to or from these territories -- something that (a French law,) voted in in June 2000 under Lionel Jospin's government, currently makes it possible to do.
If, Montebourg continued, the current French government cannot convince member countries of the Euroepan Union or its associates to suppress these unfair rules, he would advise them to do as former French President Charles de Gaulle did in 1963 with respect to Monaco, organising a customs blockade. This is reminiscent of what Willem Buiter recently recommended in his article "Blockade the tax havens."
We should add that these are, so far, just words from the French Prime Minister. We await action. Note that things are happening in Britain, too.
NB: This originally on the TJN blog