when Auto Exchange of Information (AEOI) will be the standard and every jurisdiction will have to apply it, to me there is little doubt that hiding money will be close to impossible
I was really pleased to see the focus on developing countries in the Communique as well, and I think the technical assistance aspects are extremely important, as is the need to include developing countries in the formation of new BEPS initiatives and in actual automatic exchange of tax information. I am glad that the leaders have given OECD the mandate to create this inclusion.
Let's take a look at shell companies. Heather, do you see Obama's pledge to continue to press for legislation here as an encouraging sign?
Jeffrey, there is a 50% chance that your question was not clear. and I did re-read it. These are leaders, they cannot deliver the concrete measures. but you cannot deliver the concrete measures without the leaders. thi si why you see so many references to work being done or to be done by organisations like oecd. Then if you do not trust oecd, it is another matter.
Let's say that I hope that this renewed pledge has some teeth. The President made the same pledge two years ago in the U.S.'s Open Government Partnership National Action Plan and we saw very little result from it, despite our concerted efforts to engage the Administration further. We'd like them to come to the table and really work out a plan for what this advocacy will look like.
The bully pulpit of the G8 should enhance Obama's push. Tom, there has been skepticism about Cameron's true commitment to cracking down on shell companies. Has he surprised here? Is this a turning point for the UK and the City of London?
and I shoudl add that GFI's Tom Cardamone made very useful comments that helped us in delivering a better output
talking about action rather than words, take a look at this picture of about two weeks ago
I'm glad to hear that, Raffaele.
Cameron faces a weak economy and does not want to do anything
to hobble British business..
meanwhile, he has to table proposals that have a chance of broad G8 acceptance, so its unfair to think he have free rein in what he tables
Why I am positive that change will happen, not tomorrow but will happen? When with Pascal Saint-Amans we discussed with others the possibility of amending the 1988 Convention on Mutual Administrative Assistance in Tax Matters to open it to all countries, abolish bank secrecy and domestic tax interest exceptions to the obligation to exchange info for tax purposes, people looked at us as if we came from Mars. It was 2009 and it was becasue of a pledge of the G20 in London. Now in 2013, we have 55 countries and several territories and the number is growing every week. hte picture shows the finance minsters of a number of countries including luxemburg and austria and singapore and belize signing it.
And the cover of the OECD's Shell Companies report last year just so happens to have Eight Blue Boxes jumping out of the square -- presaging G8 action on the issue! If you were to look one year ahead, what actions would you expect on tax transparency by then? Will this G8 summit truly have marked the beginning of the end to Secret Money?
With respect to the UK, I would say that the turn has been 180 degrees on the issue of anonymous shell corporations in just the last six months alone, which is pretty significant and unusual in political terms. They went from being very behind on the issue to being at the forefront. We are hopeful that the UK will follow through on implementing public registries of beneficial ownership to see their epiphany through.
The UK's commitment on Saturday for greater transparency around beneficial ownership wasn't matched by all the other G8 countries and indeed Cameron has said he would like to go further and have a public register of beneficial ownership. one could be happy that progress has actually been faster than the pace of the slowest mover
Stella, I hope so. the next step is to have all countries agree that AEOI becomes the international standard.
Four itmes to make AEOI happen : Four steps to make this reality:
(i) enacting broad framework legislation to facilitate the expansion of a country’s network of partner jurisdictions;
(ii) selecting the legal basis for the exchange of information;
(iii) adapting the scope of reporting and due diligence requirements and coordinating guidance, and
(iv) developing common or compatible IT standards.
Cara - haven't seen it yet. Looking forward to reading it.
What impact will these steps have on curtailing illicit flows and siphoning money from developing countries -- and by when?
I think the tax inspector that was finally able to get info from countries that in the past were black boxes woudl not agree that it is just a photo op. time will tell.
Stella, we hope to be up and running quickly, there is a pilot project with about 20 countries in. also for developing countries specifically, we are doing action on the ground: at THEIR requests wee developed a unique capacity building programme to provide criminal tax investigators and related specialists with the essential skills to successfully conduct modern and effective financial investigations. Countries that have indicated a wish to participate in the course include Brazil, Cameroon, Costa Rica, Ghana, Guatemala, Kenya, South Africa, Tunisia, Uganda and Uruguay. Optimistic? yes. indeed.
Stella - the auto exchange of tax information, if it includes developing countries (currently not happening) will hopefully have a significant effect, especially a dissuasive effect. The country by country reporting of taxes to tax authorities and the non-public beneficial ownership disclosure (if implemented) will have a much more limited effect. The latter two perpetuate the slow as molasses system of needing to make specific inquiries for specific information, something that developing countries do not have the resources to commit to doing in every case. When ActionAid published SAB Miller's (perfectly legal) profit shifting activities it resulted in a multi-country audit. That would not have happened if the information had been provided to tax authorities alone.
Great discussion - Many thanks to our guests -- Raffaele Russo for explaining so cogently how the OECD is working to turn a G8 photo op into a concrete actions; to Heather Lowe at Global Financial Integrity for explaining the tremendous political advances that have been made on financial transparency and the impact on developing economies; and Tom Bergin at Reuters for the UK and corporate perspective. Really appreciate your input
you're welcome Stella. Thanks all
And thanks to those who joined the discussion. Stay tuned to www.trust.org for more on Secret Money. We really appreciate your joining this event
Thanks Stella, and to all the other contributors. Sorry I didn't get a chance to engage, Cristian. Good points!
BEPS, FACT, MNE, AEI, TIWB -- Rule on! We'll get you back after the G20 to explain more progress. Thanks and goodbye to al