Tax havens in spotlight at Singapore meeting

SINGAPORE, September 28, 2010 (AFP) - A forum set up to fight tax fraud and bank secrecy, blamed in part for the world financial crisis, will meet in Singapore on Wednesday to assess progress ahead of the Group of 20 (G20) summit.

More than 200 delegates to the Global Forum on Transparency and Exchange of Information for Tax Purposes will take part in two days of talks in Singapore, an Asian banking centre that has vowed to tackle cross-border tax cheats.

"Tax avoidance and tax evasion threaten government revenues throughout the world," said a briefing paper issued ahead of the meeting, held under the auspices of the Organisation for Economic Cooperation and Development (OECD).

"In many developed countries, the sums run into billions of euros and developing countries lose vital revenue through tax evasion," it said.

"Better transparency and information exchange for tax purposes are key to ensuring that taxpayers have no place to hide their income and assets and that they pay the right amount of tax in the right place."

The Global Forum, established in 2000, was radically restructured in 2009 during a meeting in Mexico when it got a three-year mandate to strengthen the campaign. Its membership was also expanded to include all G20 members.

The G20, which includes developed countries and major emerging economies such as China and India, is expected to discuss progress on the issue at a summit in South Korea in November.

The idea is to "ensure that all the pressure (for reform) in 2009 does not drop off," said Pascal Saint-Amans, the official in charge of tax supervision for the Paris-based OECD who heads the secretariat for the Singapore meeting.

In the immediate aftermath of the global financial crisis and ensuing recession, the G20 made reforms to tame tax fraud one of its priority areas.

The OECD originally named 42 countries as tax havens, among them Monaco, Luxembourg, Switzerland and Singapore, as it led a drive to ensure that huge sums of money could not be moved around the world without any checks.

The listed countries were obliged to negotiate at least 12 tax information accords with major partners to show that they were complying with the tighter regulatory framework and so escape sanction.

Most have managed to get off the OECD list, which now only counts a few small states and Pacific Ocean islands.

The Singapore meeting will review the cases of Bermuda, Botswana, Cayman Islands, India, Monaco, Panama, Jamaica and Qatar.

Between now and the end of the year, some 40 reviews will be conducted, with the aim of going over all members within two years.

Critics say the underlying problem remain and that the regulations are not tough enough.

"This list is no longer credible," said Marina Yung of Transparency International, a group that tracks corruption.

Francois d'Aubert, an official charged by the French government with cracking down on tax fraud, said "a much tougher system" will be introduced including tighter information-disclosure requirements.

D'Aubert said two states so far had failed this first examination and if the Forum followed the recommendations of the reviewing group, they would not proceed to the second stage of the examination.

He did not name the two countries.

"The problem is that it is not certain that all the reports will be accepted and published because the meeting follows the rule of consensus," said Transparency International's Yung.

"This meeting is a first test; we will see if the Forum is really able to keep the pressure on."

As for what happens afterwards with countries identified as still posing a problem, the OECD's Saint-Amans said it would be up to the G20.

"The essential thing is that we will have a neutral, objective and international analysis of the progress made and of all the progress that still remains to be achieved."