Ethics and governance in the European Financial centers

The OECD list that was published the day before yesterday is neither fair nor true.

It is not fair as it stigmatise some jurisdictions on a grey list while condoning the US Tax Havens like Delaware, but it is true that the USA are the major contributor to the OECD budget and condone as well the US tax havens on the Stop Tax Havens Abuse Act.

It is not true as it does not take into account every parameter. As I wrote, harmful tax practices, corruption, money laundering… are definitely connected and must me assessed on a unique list as a whole. Furthermore it is inconsistent as the split of the grey list is not coherent: How a jurisdiction like Cayman Islands that signed 8 agreements or Netherlands Antilles, Antigua and Barbuda that signed 7 can be considered as tax havens while Austria, Chile, Guatemala , Luxembourg, Singapore, Switzerland that signed none are only “Financial Centers”.

The OECD criteria are a charade. Quod erat demonstrandum.

As observes a contact of mine, time is up to propose a world wide list with at least 4 categories of information used to calculate a "cleanliness" index from 0-100:

1. Combination of Banking secrecy, harmful tax practices and offshore abuse, rated out of 25.

2. TI Barometer, rated out of 25. As far as the CPI is concerned, CPI TI should review the CPI as the latest list was demonstrated that the methodology is not consistent with observed facts: http://taxjustice.blogspot.com/2008/09/backsliding-from-transparency.html

3. International provisions enacted in the positive law, rated out of 25: enevry AML provision (from the FATF), every anticorruption provision (from the OECD), every tax provision (from the OECD)...

4. Laxism (judicial haven), rated out of 25: absence of a legal framework, absence of credible enforcement, absence of credible sanctions, passive corruption through influence, poor means for the FIU, regulatory not independent enough from the business...

In those 4 issues only objective parameters should be taken into account: figures, number of cases, CTR filings, highest sanction, number of sanctions… Ratios should be used as well (cf. my comparison Monaco v. Luxembourg despite both jurisdictions are on the grey list) as numbers must be weighted according to the importance of assets under control.

For Unions, Confederations and other multi jurisdictional states, the weakest link in the chain would give the country's final grade. For Switzerland it may be Zug, Delaware for the US, Andorra for France, Hong Kong for China...

The result would be surprising: many jurisdictions on the OECD white list would be under 50.

As I said, I am afraid the OECD is unable to do the job as it is not independent and the list provided the day before yesterday demonstrated that unfortunately politics drive policies.

Only an independent body (NGO for example) can do it.