OECD tax policy head backs Bermuda’s case
A top international tax expert yesterday backed Bermuda in a row over the country’s inclusion on an EU blacklist — and said the Island should not have been included.
Pascal Saint-Amans, director of the Organisation for Economic Cooperation and Development (OECD) centre for tax policy and administration, said: “The answer is clearly and unambiguously ‘no’ — it’s not fair.”
He was speaking to The Royal Gazette after the European Commission (EC) published a 30-strong list of countries most often said by member states to be uncooperative on tax matters.
And Mr Saint-Amans added: “It’s not a new list. It’s a compilation of different lists.
“I think the Commission wanted to highlight that these lists are out there and needed to be tidied up.
“I think it’s unfortunate it’s had the opposite effect.”
Mr Saint-Amans was speaking on the eve of a meeting with Finance Minister Bob Richards, who is in Europe for talks with the OECD and the European Union.
Mr Saint-Amans was also quoted in a story in the influential London-based Financial Times.
Mr Saint-Amans said the EC move had been “very unhelpful” as it lumped together countries that had signed up to global transparency drives with countries that had stalled, like Panama.
And the Financial Times reported that Mr Saint-Amans had branded the list as “unfair, inefficient and subjective”. The Commission drew up “the first pan-EU list of third-country non-co-operative tax jurisdictions” from blacklists provided by member states.
Some countries, like Greece and Italy, listed high numbers of countries, while others like the UK, Germany and Sweden, did not submit any countries to the 30-strong list, which does not include EU member states.
Countries were included on the list if ten or more EU member states had them listed on their own national blacklists. Bermuda appears on the list of 11 EU member states.
But Mr Saint-Amans told this newspaper: “Bermuda is now largely compliant — they had some deficiencies, it’s true, but they were fixed.
“Bermuda did a good job and we can only be positive.
“It’s a co-operative jurisdiction as regards the exchange of information.”
And he added that Bermuda’s adoption of automatic exchange of tax information — the new international standard — was “very good”.
Even the UK-based Tax Justice Network, a critic of so-called tax havens, including Bermuda, said the EC list lacked objectivity and that blacklists tended to be political and single out smaller countries — when the biggest tax problems often involved major nations.
Bermuda Business Development Agency (BDA) CEO Ross Webber said: “While the OECD has confirmed that it was not the EU’s intent to create a definitive list, Bermuda should never have been included.”
He added: “International financial centres should not all be treated as one homogenous group.
“Bermuda is a clear example of one jurisdiction that has earned the right to be differentiated because of our regulatory sophistication and track record of cooperation and openness on information exchange matters.”
Mr Richards — who was also quoted in the Financial Times article — launched a blistering attack on the list after it was revealed last week.
He branded the blacklist as “unjustified and baseless” — and said that some of the countries that fingered Bermuda had failed to live up their own obligations to sign up to tax conventions.
Mr Richards added: “At least five of those 11 EU member states that have us on their national blacklists have not performed their obligations in one way or the other.
“Two of the five were to give beneficial recognition to the Multilateral Tax Convention in their blacklist criteria; one is still in the process of considering recognition of the Multilateral Convention; one has not kept their promise to send Bermuda documents to sign to take us off their list.
“One of the two EU member states earlier mentioned has not even signed up to the Multilateral Tax Convention; and; one publicly announced earlier this year that it had taken Bermuda off its blacklist.
“We have been waiting for their cooperation. It is surprising then that we would be labelled as ‘uncooperative’.”
Mr Richards said that Bermuda has signed a large number of tax information exchange agreements with countries around the world and today has 80 treaty partners because of signing the Multilateral Tax Convention — an international tax information exchange agreement.
The European Commission had not responded to a request for comment by press time.
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