{"id":34142,"date":"2016-07-22T16:33:56","date_gmt":"2016-07-22T15:33:56","guid":{"rendered":"http:\/\/www.taxresearch.org.uk\/Blog\/?p=34142"},"modified":"2016-07-22T16:33:56","modified_gmt":"2016-07-22T15:33:56","slug":"the-usa-will-avoid-being-cast-a-a-tax-haven-but-that-brings-the-whole-process-into-disrepute","status":"publish","type":"post","link":"https:\/\/www.taxresearch.org.uk\/Blog\/2016\/07\/22\/the-usa-will-avoid-being-cast-a-a-tax-haven-but-that-brings-the-whole-process-into-disrepute\/","title":{"rendered":"The USA will avoid being cast a a tax haven – but that brings the whole process into disrepute"},"content":{"rendered":"

I mentioned earlier today<\/a> that there was a chance that if the OECD applied its new tax haven criteria correctly that the USA, Israel and Turkey might join the more usual suspects on a list of tax havens. Now the Tax Justice Network has published a press release<\/a> summarising the ruses used to ensure that this is not the case, which effectively discredit the whole process. I share it in full, as follows:<\/p>\n

Press Release: For immediate release, July 22, 2016<\/em><\/p>\n

The G20 and OECD tax haven blacklist proposals risk becoming another whitewash<\/h3>\n

This weekend G20 <\/strong>Finance Ministers from the G20 countries will <\/strong>meet in China<\/strong><\/a>. One of the items on their agenda will be to\u00a0agree the criteria for identifying non-cooperative jurisdictions with respect to tax transparency, which the OECD has been mandated to establish. The first details of the proposals have become public and our analysis gives rise to grave concerns that the criteria are, in the same way as past attempts at blacklists, weak and ineffective. The USA in particular is likely to escape blacklisting because of the peculiar nature of the criteria.<\/strong><\/p>\n

The three criteria the OECD has come up with for assessing non-cooperative jurisdictions are summarised below. Each country has to meet two<\/strong> of the three in order to escape blacklisting:<\/p>\n

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  1. If the country gets\u00a0a rating\u00a0of \u201clargely compliant\u201d or better from\u00a0the OECD\u2019s Global Forum<\/a>,\u00a0as regards the\u00a0\u201cexchange of information on request\u201d standard of transparency.<\/li>\n
  2. The country commits\u00a0to adopting automatic information exchange (the so-called Common Reporting Standard, CRS),\u00a0and to begin exchanges by 2018 at the latest.<\/li>\n
  3. The country has signed the Multilateral Convention on Mutual Administrative Assistance in Tax Matters<\/a>\u00a0(MCMAA), a multilateral framework for all kinds of information exchange, or if it has what the OECD considers a sufficiently broad exchange network providing for exchange of information on request and automatic exchange of information.<\/li>\n<\/ol>\n

    <\/span>The first<\/strong> and most obvious escape route from the blacklist is that a country only needs to fulfil two out of these three criteria.[1]<\/sup><\/sup><\/a> A country can implement the \u2018on request\u2019 standard, plus the MCMAA, yet shun the OECD\u2019s much more comprehensive automatic information exchange project \u2014\u00a0and avoid being\u00a0blacklisted.<\/p>\n

    The second<\/strong> escape route concerns problems with criterion\u00a01<\/strong>:<\/p>\n