The Guardian has reported that:
Addressing the Scottish Labour party conference, [Gordon Brown] is expected to highlight plans to crackdown on countries that refuse to co-operate on tax havens, possibly by putting them on an OECD blacklist.
Now there’s a development. Let’s roll back the actions of the Bush administration in June 2001 when they pushed the OECD harmful tax competition initiative into touch, just before the events of 9/11.
Now it so happens I approve of blacklists. I think they can have a significant impact, simply by their creation. States will want to get of any list as fast as possible. They will as a consequence change behaviour. That is exactly what they are meant to do.
However, blacklists also have to be reasonable, rational and justifiable.
A while ago the Tax Justice Network produced a listing of tax havens based upon a wide range of sources dating from the 1970s. I reproduce it below. I think this type of cluster approach is important. Using one criteria is not enough. Nor is one reference enough unless there is clear evidence to support inclusion.
In practice, I will include every state on the list below with a score of four or more plus Dubai, because of its emerging status, Austria because it refuses to exchange information under the EU STD, Belgium for the same reason until it does implement its decision to exchange information under that directive, whilst excluding Niue and Nauru because as far as I can tell they have ceased operation.
I suggest that this is rational, supported and justifiable.
And I know Ireland, Luxembourg and Switzerland will not like this. That is their problem.
The full listing is available at page 25 here. A summary is here:
Rank |
Location | Total |
1 | Bahamas | 11 |
2 | Bermuda | 11 |
3 | Cayman Islands | 11 |
4 | Guernsey | 11 |
5 | Jersey | 11 |
6 | Malta | 11 |
7 | Panama | 11 |
8 | Barbados | 10 |
9 | British Virgin Islands | 10 |
10 | Cyprus | 10 |
11 | Isle of Man | 10 |
12 | Liechtenstein | 10 |
13 | Netherlands Antilles | 10 |
14 | Vanuatu | 10 |
15 | Gibraltar | 9 |
16 | Hong Kong | 9 |
17 | Singapore | 9 |
18 | St Vincent & Grenadines | 9 |
19 | Switzerland | 9 |
20 | Turks & Caicos Islands | 9 |
21 | Antigua & Barbuda | 8 |
22 | Belize | 8 |
23 | Cook Islands | 8 |
24 | Grenada | 8 |
25 | Ireland | 8 |
26 | Luxembourg | 8 |
27 | Monaco | 8 |
28 | Nauru | 8 |
29 | St Kitts & Nevis | 8 |
30 | Andorra | 7 |
31 | Anguilla | 7 |
32 | Bahrain | 7 |
33 | Costa Rica | 7 |
34 | Marshall Islands | 7 |
35 | Mauritius | 7 |
36 | St Lucia | 7 |
37 | Aruba | 6 |
38 | Dominica | 6 |
39 | Liberia | 6 |
40 | Samoa | 6 |
41 | Seychelles | 6 |
42 | Lebanon | 5 |
43 | Niue | 5 |
44 | Macao | 4 |
45 | Malaysia (Labuan) | 4 |
46 | Montserrat | 4 |
47 | Maldives | 3 |
48 | United Kingdom | 3 |
49 | Brunei | 2 |
50 | Dubai | 2 |
51 | Hungary | 2 |
52 | Israel | 2 |
53 | Latvia | 2 |
54 | Madeira | 2 |
55 | Netherlands | 2 |
56 | Philipines | 2 |
57 | South Africa | 2 |
58 | Tonga | 2 |
59 | Uruguay | 2 |
60 | US Virgin Islands | 2 |
61 | USA | 2 |
62 | Alderney | 1 |
63 | Anjouan | 1 |
64 | Belgium | 1 |
65 | Botswana | 1 |
66 | Campione d'Italia | 1 |
67 | Egypt | 1 |
68 | France | 1 |
69 | Germany | 1 |
70 | Guatemala | 1 |
71 | Honduras | 1 |
72 | Iceland | 1 |
73 | Indonesia | 1 |
74 | Ingushetia | 1 |
75 | Jordan | 1 |
76 | Marianas | 1 |
77 | Melilla | 1 |
78 | Myanmar | 1 |
79 | Nigeria | 1 |
80 | Palau | 1 |
81 | Puerto Rico | 1 |
82 | Russia | 1 |
83 | San Marino | 1 |
84 | Sao Tome e Principe | 1 |
85 | Sark | 1 |
86 | Somalia | 1 |
87 | Sri Lanka | 1 |
88 | Taipei | 1 |
89 | Trieste | 1 |
90 | Turkish Republic of Northern Cyprus | 1 |
91 | Ukraine | 1 |
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Yes, you are quite right that Niue has ceased tax haven operations. This was done by the bullying Bush administration to make an example of someone. Niue did not have the resources to defend its tax haven status. Although a measly 1.5 million was involved it had the effect of destroying the Niue (POP 1800 in 99)economy driving migration to its current population of 900. All America needed to do was replace that 1.5 million with some form of aid. But no, it, along with New Zealand’s neo colonial control of Niue has destroyed a unique culture to the point of no return.
Hear, hear. And now Obama and the other tax-and-spend types wish to continue with the same “Bush league” policy of the very person they hold out as the Anti- Christ.
So now Richard you propose to take action against everyone over the 4 rating seeing as you have only a 3 behind yours. A BLACKlist is just that and if you are truely behind fair taxation than you would not shirk from insisting your own house clean up it’s act as well as your #2 rated buddy across the pond. I didn’t see anything there that said it was a black-and gray list did you?
I think the black list approach is out of date. I would rather prefer that there is a list of sanctioned countries and a simple system in place just like in soccer. The first yellow card is a warning, the second yellow card means you go off the pitch and the country is placed on the list of sanctioned countries for 3 to 6 months. It is all all about fair play, isn’t?
The questions remains here who is the referee or who are the referees?
Now definitely not one whose country is on the sanction list.
Overall this would be a very dynamic approach and teach the players fairplay and that is what the Society wants, fairplay!
You have a very interesting suggestion Rudolf but as you say the very crux of the problem is in deciding who the referee(s) would be. I would also submit that it should not be from the plaintiff country or countries as well. What about this development on your idea? If both sides cannot come to an agreement diplomatically within a certain period of time or if discussions should break down completely with no hope of restart than the referees would be selected from a neutral country or countries who have no interest in the outcome of the case. As long as the referees do not have an inherent bias towards one side or the other there should be sufficient to choose from.
(Now we come the the truly difficult side and that’s getting the parties to accept your solution as binding!)
So why is the United States not on your blacklist ? 900,000 companies in Delaware, a few less in Wyoming and Arizona etc. all supposedly owned by non-US residents with no beneficial ownership disclosure and no filing of accounts ? The US should be right up there on the list, somewhere well above the 4 cut-off point.
To put things into perspective, the BVI has around 700,000 IBCs and is by a huge distance the most popular corporate domicile for offshore companies globally. 900,000 in Delaware ?