New tax haven blacklist likely

Seventeen countries led by France and Germany decided to draw
up a new blacklist of tax havens, which could include Switzerland, in a first
step toward rewriting the rules of global finance.

The world’s 40-odd tax havens, such as the Cayman Islands and
Jersey, are known hideaways for undeclared revenue and host many of the
non-regulated hedge funds that came under fire following the recent financial
meltdown.

French Budget Minister Eric Woerth said the 17 governments at
the Paris meeting agreed to task the OECD with drafting a new expanded blacklist
of countries that fail to cooperate on tax evasion and transparency.

German Finance Minister Peer Steinbrueck singled out
Switzerland for criticism, saying it had failed to fully cooperate on taxation
issues and deserved to be on the new list.

“Switzerland should be on the blacklist and not the green
list” of countries that do cooperate, he said.

“Banking secrecy has its limits,” Woerth added. “Switzerland
has made progress . . . but we must take matters farther.”

Switzerland, often criticised for its opaque bank secrecy
laws, decided to boycott the meeting along with Luxembourg, while the US and
Austria declined to send representatives.

(Source : The Economic Times, dated 23-10-2008)