The Organization for Economic Co-Operation and Development last Thursday released its latest list of uncooperative tax havens, also known as its blacklist. As usual, the list includes a few
online gambling jurisdictions.
In the wake of the organization's latest policy review, the tax practices of Andorra, Liechtenstein, Liberia, Monaco, the Marshall Islands, Nauru and Vanuatu were still found to be uncooperative.
In 1998 the OECD announced its intentions to combat tax practices that don't conform to its standards of transparency and ease of information exchange. Since then, the organization has gotten commitments to improve tax practices from 31 jurisdictions.
While some countries that foster Internet gambling companies made the blacklist, others have won praise from the OECD for their commitments to tax reform. Those nations include Aruba, Bermuda, Cyprus, the Isle of Man, Malta, the Netherlands Antilles and the Cayman Islands.
Gabriel Makhlouf, chairman of the OECD Committee on Fiscal Affairs, said that while progress has been made toward the group's goal, much work remains.
"We look forward to working with all the jurisdictions towards the twin goals of transparency and effective information exchange," he said. "We are disappointed that some jurisdictions have chosen not to make commitments and we will want to maintain contact with them in order to encourage them to do so as soon as possible."
Makhlouf also said the OECD will keep an eye on any new tax havens that come into being.
The publication of the new list brought about both praise and criticism from the international community. The head of one U.S. lobbying group, which favors loose government controls on taxation and financial matters, called the list a "big nothing" because of what he perceives as a lack of enforcement pertaining to the nations' commitments.
"You'd be hard-pressed to find a country that would sanction these countries," said Andrew Quinlan, president of the Center for Freedom and Prosperity. "I know the U.S. is on record saying they aren't going to sanction these countries. And then, I guess, who cares if France does."
Some countries, like Liechtenstein and Vanuatu, haven't committed to the OECD because they don't see the benefits to doing so, Quinlan said.
"They are basically saying, 'If this is something that's going to be good for us, then we may consider it,'" he said. "Until Luxembourg and the U.S. do it, then we're not going to do it. We want a
level playing field."
Makhlouf addressed the issue of a level playing field as well. He said the OECD understands the concern and is trying to prevent a situation where some financial centers would have an economic advantage.
"Financial services are extremely mobile and it is in no one's interest that harmful activities move to jurisdictions that do not meet acceptable standards of transparency and effective exchange of information," he said. "We have gone a long way towards achieving a level playing field as a result of having a very large number of on and offshore financial centers commit to these same principles."