SMALL NATIONS CALL FOR A LEVEL PLAYING FIELD IN INTERNATIONAL TAX MATTERS

BBC Caribbean Report, 6 March 2002, 21:15 GMT

http://www0.bbc.co.uk/caribbean/2115rep.ram

The programme's opening item is "The Barbados Prime Minister denies his country has broken ranks with Caricom on the OECD tax initiative". The journalist notes, "The OECD says the island already has transparent tax and regulatory systems, which appears to be an admission that Barbados should never have been on the blacklist".

The item then continues as follows:

Carol Orr

But even as they accept OECD restrictions, some Caribbean nations continue to call for what they describe as "a level playing field in international tax matters". They're annoyed that the OECD offshore centres, Switzerland and Luxembourg, along with Portugal and Belgium, have refused to cooperate with their own organisation while they insist that others comply.

Bertram Niles

Ben Coleman is a spokesman for the International Tax and Investment Organisation, a grouping of Caribbean and other Commonwealth tax centres. I asked him why there was this recent flurry of commitment letters from the Caribbean.

Ben Coleman: Three weeks before the deadline, the OECD sent a letter around to a lot of people, saying, "We accept that you can put wording relating to a level playing field in any commitment letters you may wish to make to us", and I think that that is probably the most significant aspect of what has happened and what is happening at the moment. As I think anybody who has followed this debate will know, the small countries who have been targeted by the OECD have for a long, long time been saying, "Why should we do things before you, the OECD's own members?" And they are thinking particularly in this case of Switzerland and Luxembourg, who have refused to take part in the OECD initiative but who are probably among the world's leading offshore centres, although they're members of the OECD. And the OECD has never actually indicated that Switzerland and Luxembourg will be making the changes that the OECD is demanding of people who aren't even in the OECD club.

BN: But these countries are still going ahead, and some of them have actually signed and committed to change their systems by the 31st December 2005.

BC: But if you look at the commitment letters, you will see that all of the ones that have so far been published refer now to a level playing field. And they refer to the fact that, effectively, the commitments are predicated on the basis that a level playing field will exist. And from the statements I've seen a number of jurisdictions making, their full intention is that, if a level playing field isn't achieved, these commitments no longer are valid.

BN: So essentially you're saying that, unless countries like Luxembourg and Switzerland sign on to the OECD initiative, the Caribbean countries would not feel obliged to make their systems transparent, to exchange tax information and the like?

BC: I think there is generally a move towards transparency and exchanging information. I think it is the detail of what is required has to be the same for Switzerland and Luxembourg, and indeed Belgium and Portugal, who are also members of the OECD who have refused to take part in the initiative. It has to be the same for those four countries as it is for all the non-OECD countries. That doesn't mean, as the OECD interprets it, that the ITIO members are asking for sanctions to be imposed on Luxembourg and Switzerland. What it means is the ITIO members and other jurisdictions should not be asked to do anything before Switzerland and Luxembourg. We must all march together, taking the same steps at the same time.

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