Global Policy Forum

New OECD report on automatic information exchange: Will developing countries be left out?

Standard_of_Automatic_Exchange_of_Financial_Cover_Page-153x215Today the OECD presented its report on a new global standard for countries and tax havens to exchange information with each other, a new tool for fighting the scourge of tax evasion. The report contains many positive elements but falls far short of what the world’s citizens desperately need – especially citizens in poorer countries.

February 13, 2014 | TJN

New OECD report on automatic information exchange: Will developing countries be left out?

Responding to a mandate from G20 leaders to reinforce action against tax avoidance and evasion, the OECD has unveiled today a new single global standard for the automatic exchange of information between tax authorities worldwide.

The Tax Justice Network states that:

  • The OECD plan is likely to result in developing countries being excluded because they are expected to provide ‘reciprocal’ information exchange, even though pretty much all active tax havens are in rich countries, and many developing countries would need to sacrifice scarce resources to set up the arrangements to collect the information to be exchanged.
  • The OECD standard, while technically useful, contains loopholes that can easily be, and must be, closed.
  • Freeports, safety deposit boxes and other kinds of storage mechanism are excluded.
  • There are no sanctions for recalcitrant jurisdictions.

Background: from ‘on request’ to ‘automatic’ information exchange

The OECD is the dominant global body setting standards for information exchange. Its current dominant standard of ‘upon request’ standard for information exchange is woefully inadequate. In April 2013, however, G20 Finance Ministers and Central Bank Governors endorsed a complementary, and far stronger standard that we have long called for: automatic information exchange (AIE). The G8 Presidency requested that the OECD write this report about just how the AIE project should work.

Download the OECD report "Standard for Automatic Exchange of Financial Account Information" here.

Read the detailed response to the new report by Tax Justice Network (TJN) here.

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