On cue the OECD delivers a report requested by the G8 this morning that begins by alleging vast quantities of untaxed cash are hidden in offshore centres.
A new report has been published by the OECD this morning. Keen to reassert their positioning as the custodian of global information exchange they appear to have bowed to the pressure from the EU and the UK to sign up to the anti-offshore lobby. It was known they were investigating automatic information exchange following the April 2013 G20, but the pointed commentary today by Angel Gurria appears to be cheerleading the G8 UK agenda.
The reality is the weak defences and lack of information capture in the UK, US and France mean that those countries are much more likely to be safe harbours for illicit cash, but unfortunately as they pay the OECD bills it isn't too likely we will see much commentary along those lines at this G8. I have only been able to read the introduction to the report at this stage but it would appear to be designed to tee up Osbornes presentation on tax at todays G8 session on tax evasion.
The OECD are right to focus on the problem but wrong to single out offshore, and given a hitherto relatively objective and non-partisan approach this is disappointing.
That said it is not that surprising given the EU and UK have introduced a series of competing tax information exchange initiatives and along with US FATCA, this has threatened to displace the traditional role of the OECD in this area.
In some respects it is a shame that on request information exchange has not been given enough time to work and embed, as with AEOI it is likely that many millions of pieces of data will circulate around the system with most of it never being looked at, in the hope of catching the small minority who might cheat.
Is this a problem for Jersey? Not really. Our policy has been for many years to adopt international standards and to pursue only clean disclosed business. Provided AEOI is adopted as a global standard there should be no relative cost competitiveness issues although there will be a significant absolute increase in costs. I will provide more commentary once I have digested the entire report.