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O’NEILL LIMITS INFORMATION EXCHANGE IN OECD LETTER
Tax-News.com has obtained a copy of a letter written by US Treasury Secretary Paul O'Neill to a group of his OECD Finance Minister colleagues following his public renunciation of some aspects of the OECD's “harmful tax competition” initiative. The letter, to Gordon Brown of the UK, Hans Eichel of Germany, and Laurent Fabius of France, among others, makes it clearer that O'Neill is both against any attempt to rein back tax competition, but also against the OECD's attack on “discriminatory” tax regimes. The letter also would seem to say that information exchange between countries is only justified when information exists to inculpate a specific individual. This clarification is important in view of the OECD's attempt to portray recent meetings in Paris as heralding the US's recommitment to extensive information exchange.
Paul O'Neill's original statement in May ended with these words:
'The work of this particular OECD initiative, however, must be refocused on the core element that is our common goal: the need for countries to be able to obtain specific information from other countries upon request in order to prevent the illegal evasion of their tax laws by the dishonest few. In its current form, the project is too broad and it is not in line with this administration´s tax and economic priorities.'
These words would have permitted quite extensive information exchange, and an OECD meeting of high-level tax officials in Paris to re-shape the 'harmful tax competition' initiative ended on 13th June with the OECD duly trying to spin the meeting as a reaffirmation of generalised information exchange.
“Tax officials from the United States and other countries ended a meeting here today and returned home to seek political agreement for proposals under which the United States and the Organization for Economic Cooperation and Development would cooperate on reducing tax revenue lost to offshore havens,” said a communique. "Many of the countries wish to go back to their governments to seek political backing for the proposals under discussion," said Nick Bray, a spokesman for the OECD. “New agreements for the plan are likely to concentrate on greater transparency and exchange of information, which the United States supports.”
But O'Neill's letter, dated June 7th, allows only a much more tightly defined interpretation of what the US will sign up to. He accepts “the need for countries to be able to obtain specific information from other countries upon request in order to enforce their respective tax laws”, and agrees to 'effective information exchange when necessary in specific cases'.
Asked to comment, Andrew Quinlan, President of the Washington-based Centre for Freedom and Propserity, which has been very active in opposing the OECD's initiative, said:
"While O'Neill's statement is not 100 percent what we want, it is closer to our position than the OECD's position. Most importantly it rejects indiscriminate information exchange."
See a full copy of Secretary O'Neill's letter in Tax-News.com Resources.More on this story here.
U.S. HOUSE MAJORITY WHIP ENTERS LISTS AGAINST OECD
House Majority Whip Tom DeLay has come out "strongly" against the OECD and EU information exchange initiatives in a letter to Treasury Secretary Paul O’Neill.
DeLay is "strongly opposed to the 'information exchange' tax initiatives being promoted by the European Union (EU) and the Organization for Economic Cooperation and Development (OECD). These assaults on financial privacy and due process legal protection are driven by a desire to thwart international tax competition."More on this story here.
LOBBYISTS WORK TO LIMIT OFFSHORE INFORMATION EXCHANGE
After a series of statements and meetings in May and June which have clarified the opposition of the US administration to many aspects of the OECD's “harmful tax competition” agenda, the Centre for Freedom and Prosperity (CFP), which has been highly active in lobbying for such an outcome, warns that there is still work to be done.
Dan Mitchell, Chairman of the CFP, has sent a 'strategic memorandum' to key figures in the fight against the OECD's plans, including leading politicians in the low-tax jurisdictions.More on this story here.
MUMBAI PROPOSED AS NEW ASIAN FINANCIAL CENTER
The Indian government has asked the Reserve Bank of India (RBI) to look into the possibility of transforming Mumbai into an offshore banking centre, it was revealed recently. The commerce ministry had asked the central bank to consider the logistics of establishing international financial centres in the Special Enterprise Zones (SEZ) that have been established throughout India. However, the current thinking is that Mumbai (formerly Bombay) has a strong environment for financial services, and may in fact, along with other cities like it, be a more suitable location.
At present the RBI is just considering the possibilities, and the form that the city's transformation to international financial hub might take is far from clear. However, officials from the central bank will soon be taking a tour of Asian financial centres, including Shanghai, Hong Kong, and Singapore, in order to take a close look at their systems.
Some fairly sizeable changes would need to be made to India's regulatory regime in order to accommodate an offshore banking centre, including the liberalisation of exchange control rules for foreign entities. However, according to experts, the RBI would not necessarily have to totally dismantle the present exchange control regime or usher in complete convertibility. Senior figures believe that similar flexibilities to those presently afforded to registered FIIs could be afforded to foreign entities on their foreign currency resources held in Mumbai.More on this story here.
NEW YORK CLOSER TO CELL BAN
The New York Senate approved a measure that would make the state the first in the nation to ban drivers from using handheld cell phones.
The approval came Thursday night after Gov. George Pataki and legislative leaders said an agreement on the proposal had been reached. The assembly was to take it up on Monday.
"Finally, we will get the bird back in the cage," said Assemblyman Felix Ortiz, who began his campaign for the ban in 1996 amid his colleagues' snickers. "People were making a lot of fun of me, but it eventually became not only an issue at the state level, but on the national level."
Lawmakers embraced the notion after independent polls showed New Yorkers favoring the ban by a wide margin. A March poll from the Quinnipiac University Polling Institute found that 87 percent of New York voters supported a ban.
Several counties across the state have already enacted such bans. Thirty-nine other states are considering similar laws, according to the National Conference of State Legislatures.
Violators of the New York law could be fined up to $100 beginning in December.
If approved and signed by Pataki, the New York proposal would take effect Nov. 1, but violators would get only a verbal warning for a month. Those nabbed after Dec. 1 would be ticketed, but they could get that dismissed through February by showing a receipt for a hands-free system.More on this story here.
SWISS BACK BANKING SECRECY
More than 80 per cent of the Swiss back the country’s tight banking secrecy laws, but many also believe more could be done to combat money laundering, according to a new survey by the Swiss Bankers Association.
Seventy-two per cent said that the country should not yield to international pressure to abolish financial privacy, according to the survey, released on Monday.
"Protecting an individual’s financial privacy is a very worthy cause. The Swiss acknowledge its importance and continue to give it their overwhelming support," said Urs Roth, the association’s chief executive.
As part of its drive to combat tax evasion, the European Union wants Switzerland to report interest and dividend income earned by EU citizens but the Swiss authorities have refused on the grounds that it would violate banking secrecy.
Critics of banking secrecy law say that they make Switzerland appear a safe haven for the ill-gotten gains of gangsters and crooked politicians.
Almost two thirds of the 1,007 Swiss citizens surveyed said they thought the banks could more to fight money laundering and should reject deposits from foreign dictators, such as former Nigerian strongman, Sani Abacha, and the late Zairean leader, Mobutu Sese Seko, both of whom had Swiss accounts.
Meanwhile, an even higher percentage, 77 per cent, felt Switzerland was already doing as much, if not more, to combat the problem as banks in other countries.More on this story here.
KINGDOM OF SEALAND ENDURES
Sealand, the would be “data haven” off the coast of Britain, a “tax haven on steroids”, takes on new meaning as New Labour’s Draconian plans to restrict British liberties expand.More on this story here.
U.S. COURTS ASSERT OFFSHORE POWERS
A growing trend in US courts has offshore financial implications; successful US lawsuits against foreign persons and entities.More on this story here.
BLAIR KILLS BRIT’S FREEDOMS
LONDON. Curbs on the ancient right to jury trial, greater police powers, asset forfeiture, money laundering restrictions, relaxed evidence rules, eliminating protections against double jeopardy; New Labour's grim second term.More on this story here and here.
Add to those assaults on freedom, planned UK government computerized checks on every aspect of each citizen's life.More on this story here.
IRELAND STANDS FOR FREEDOM
By their resounding 'no' in a referendum on the Nice Treaty, Irish voters advanced the cause of saving democracy from the EU.More on this story here.
Ireland's Atty. Gen. accuses EU officials of arrogantly trying to force Europe's diverse nations into a superstate no one wants.More on this story here.
While the arrogant EU Commission president says he doesn't care how the Irish vote, the EU will do as it pleases.More on this story here.
LORD ASHCROFT RESPONDS
LONDON. Lord Michael Ashcroft, Tory peer and BELIZE's major investor, flays Labour for its political attack on him and harm to that Caribbean tax haven's impoverished people.More on this story here.
GRENADA FEARS F.A.T.F. BLACKLISTING
St. GEORGE's. Awash in financial scandals, officials fear Grenada may be blacklisted as FATF meets today to make revisions.More on this story here.
BERMUDA SETS EXAMPLE
Writing in Investors Business Daily, Dan MITCHELL of the Heritage Foundation uses tax free BERMUDA as an example of the benefits of free trade and international tax competition.More on this story here.
NEW ZEALAND REJECTS O.E.C.D. HOME TAX
Mark Parson alerts us to the NZ government's rejection of an insane OECD idea that owners' home equity be taxed. Isn't anyone safe from these Paris bureaucrats?More on this story here and here.
An historic coalition of 33 citizen taxpayer groups worldwide jointly declares against the OECD and EU tax cartel plans.More on this story here.
BIG FIVE ACCOUNTING FRAUD
Arthur Anderson is fined $7 million for the civil fraud of cooking books, the largest US accounting fine ever.More on this story here.
IRS TARGETS SELF-EMPLOYED CONSULTANTS
WASHINGTON. Also a target, their business travel expenses.More on this story here.
CPA’S & MONEY LAUNDERING
An expert explains the growing role of accountants in spotting dirty money, and in watching you on behalf of the government.More on this story here.
MONEY LAUNDERING Q. & A.
BANGKOK. A THAI law firm provides a useful anti-ML primer for businesspersons worldwide.More on this story here.
COOK ISLANDS FIGHT DIRTY CASH
RAROTONGA. The C.I. sets up its new Financial Intelligence Unit to combat dirty money with New Zealand's help.More on this story here.
COPENHAGEN. A tax evading Dane gets 4 years in prison.More on this story here.
ABOLISH THE U.S INCOME TAX?
US Rep. Ron PAUL of Texas introduces The Liberty Amendment, repealing the 16th Amendment and ending income taxes.More on this story here.
DEXIA BANK EXPANDS AGAIN
Dexia, the Franco-Belgian financial services group expands.More on this story here.
LAUGHING ALL THE WAY TO OFFSHORE BANKS
Business Week frets over the BUSH administration's policies favoring offshore banking and world tax competition.More on this story here.
E.U. SPY SYSTEM PLANS
BRUSSELS. EU Parliament member says indignation over US's Echelon is a smokescreen to hide the EU's own spy system.More on this story here.
MOSCOW. As in the old Red days, Russians are spying on their neighbors for PUTIN's KGB style government.More on this story here.
HAVENS DEMAND O.E.C.D. VOICE
In advance of this week's OECD meeting on tax competition, an association of small haven nations again demands the right to participate fully in an world tax discussion.More on this story here.
Meanwhile, rumor says the US will back international "transparency" and information exchange, if the OECD formally drops its phony campaign against "unfair tax competition."More on this story here.
SWISS UNITED NATIONS VOTE
BERN. In 1986, the SWISS electorate voted down UN membership by a 3 to 1 majority. Last week the Swiss Senate voted to join the UN. Another nationwide referendum is likely next year.More on this story here.
Under EU attack for its historic secrecy, Swiss private banking is still growing markedly as measured by increased staff and cash.More on this story here.
And a foreign policy expert says traditional Swiss isolationism is "under pressure" and will change within 10 years.More on this story here.
The PHILIPPINES, ISRAEL & RUSSIA react to their continued FATF blacklisting with promises of reform.More on this story here and here and here.
BERMUDA DEFENDS OFFSHORE
At a global anti-ML conference next week in Zurich, BERMUDA will defend tax havens, explaining dirty cash originates onshore.More on this story here.
ANTIGUA OFF U.S. HIT LIST?
St. JOHN'S. The government cleaned up its act, now may get an end to the arbitrary US and UK financial advisories imposed on the islands.More on this story here and here.
BRITISH VIRGINS BOOMING
ROAD TOWN. In spite of OECD blacklisting, the BVIs are raking in cash and boosting IBC registrations.More on this story here.
KEY US CONGRESSMAN OPPOSES O.E.C.D.
WASHINGTON. U.S. House Whip Tom Delay (R-Tex), has come out strongly against the OECD/FATF demands for tax information exchange, threatening to cut US budget funding for any such programs.More on this story here.
THE WORLD’S RICHEST PEOPLE
Forbes magazine publishes its annual list of the richest of the rich; 538 billionaires from 46 nations.More on this story here and here.
And here is what worries rich Americans,More on this story here.
OFFSHORE BANKS BROADEN APPEAL
Once the preserve of the very wealthy, offshore banks now cater to all sorts of rich people.More on this story here.
BASLE ACCORDS DELAYED
Banks welcome the decision by global banking supervisors to delay for a year new rules on amounts of capital banks are required to hold.More on this story here.
OFFSHORE TAX SHELTER UPHELD
ATLANTA. A federal appeals court overturns a 1999 ruling that United Parcel Service illegally used offshore companies as tax shelters. UPS could save $1.8 billion.More on this story here and here.
W.T.O. THREATENS FSC’S
U.S. tax breaks for foreign sales corporations are under fire again from the World Trade Organization.More on this story here.
HIDDEN EUROPE BILLIONS SPENT
LONDON. A pan-Europe spending boom is underway as the full euro draws nigh.More on this story here.
WHAT HAS HAPPENED TO HARD CURRENCY?
Contrarian Jim GRANT explains.More on this story here.
FORBES BEST OF THE NET
Forbes magazine picks for "Best of the Net" in:
* BANKING: here.
* INVESTMENTS: here.
* TAX PLANNING: here.
* OFFSHORE NEWSPAPERS: here.
* LEGAL SOURCES: here.
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