*EPF113 06/26/00
Text: Treasury's Summers on OECD Harmful Tax Competition Report
(Naming jurisdictions with harmful tax regimes 'crucial') (790)
U.S. Secretary of the Treasury Lawrence Summers welcomed the new Organization for Economic Cooperation and Development (OECD) report on harmful tax competition and praised the naming of 35 jurisdictions as tax havens and 47 tax regimes within OECD member countries as "potentially" harmful.
"The identification of tax havens and potentially harmful tax regimes is a crucial step in preventing distortions that could undermine the benefits of enhanced capital mobility of today's economy," Summers said in statement issued June 26, shortly after the report was released at the OECD in Paris.
Summers added that he hoped the jurisdictions named as tax havens will "take this opportunity to work with the OECD to reform their harmful tax practices."
The 35 jurisdictions are: Andorra, Anguilla, Antigua and Barbuda, Aruba, the Bahamas, Bahrain, Barbados, Belize, British Virgin Islands, Cook Islands, Dominica, Gibraltar, Grenada, Guernsey/Sark/Alderney, Isle of Man, Jersey, Liberia, Liechtenstein, Maldives, Marshall Islands, Monaco, Montserrat, Nauru, Netherlands, Niue, Panama, Samoa, Seychelles, St. Lucia, St. Christopher & Nevis, St. Vincent and the Grenadines, Tonga, Turks & Caicos, US Virgin Islands and Vanuatu.
The OECD's Forum on Harmful Tax Practices was established in April 1998 to address the growing problem of unfair tax competition. The Forum will continue its efforts to work with countries and territories that want to make reforms in their tax regimes and will be developing and coordinating "defensive" sanctions against jurisdictions that do not change. The OECD will published a "List of Uncooperative Tax Havens" in July 2001. Jurisdictions on this list could be subject to OECD sanctions.
The OECD press release on the report, which is entitled "Progress on Identifying and Eliminating Harmful Tax Practices," can be found at: http://www.oecd.org/media/release/nw00-66a.htm
The complete report in .PDF format is available at: http://www.oecd.org/daf/fa/harm_tax/Report_En.pdf
The OECD harmful tax competition report was released four days after the Financial Action Task Force (FATF) on Money Laundering, which has its secretariat at the OECD, published a report naming 15 jurisdictions that are failing to take adequate measures to combat international money laundering. The FATF report is separate from the OECD's harmful tax project. The report by the FATF -- established by the Group of Seven (G-7) major industrialized countries -- can be found at http://www.oecd.org/fatf/pdf/NCCT2000-en.pdf
A third report -- released in April by the G-7 sponsored Financial Stability Forum -- categorize the so-called "offshore" financial centers of more than 40 countries and territories according to the perceived quality of supervision and the degree of regulatory cooperation. The Forum press release on this report, which provides the categories for the jurisdictions, can be found at: http://www.fsforum.org/Press/Home.html
Following is the text of Summers' statement on OECD report:
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TREASURY WELCOMES OECD REPORT ON HARMFUL TAX COMPETITION
Treasury Secretary Lawrence H. Summers today welcomed the OECD's report on the global effort to protect the integrity of national tax systems from harmful tax competition. The report details the OECD's work in this area and identifies 35 jurisdictions as tax havens and 47 tax regimes in OECD member countries as potentially harmful.
"The identification of tax havens and potentially harmful tax regimes is a crucial step in preventing distortions that could undermine the benefits of enhanced capital mobility of today's economy," said Secretary Summers. "It is our hope that the listed tax haven jurisdictions will take this opportunity to work with the OECD to reform their harmful tax practices."
Last week, the OECD announced that six jurisdictions made commitments to eliminate their harmful tax practices and would not be included in the tax haven list, even if they otherwise would have met the tax haven criteria OECD member countries committed to eliminate their harmful tax practices in 1998. Those countries will be meeting with many non-member countries this week at a symposium in Paris to further discuss ways to address the global problem of harmful tax competition.
"We encourage all countries to follow the example set by the OECD member countries and six non-member jurisdictions that have committed to eliminate harmful tax practices," Secretary Summers said.
The OECD's Forum on Harmful Tax Practices, which the United States co-chairs, was established in April 1998 to address the growing problem of unfair tax competition. The Forum will continue its efforts by working with cooperative tax havens, developing more detailed guidance to help countries determine whether their tax regimes are actually harmful, and developing and coordinating defensive sanctions.
The full OECD report, entitled "Progress on Identifying and Eliminating Harmful Tax Practices," is available on the OECD website at: http://www.oecd.org.
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(Distributed by the Office of International Information Programs, U.S.
Department of State. Web site: http://usinfo.state.gov)
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