The Battle of the List

Cast your minds back to the dark days of April this year and the G20 summit at which world leaders heralded the day the world "fought back against the recession". Mapping out a new future for financial regulation, unveiling a trumpeted US$1,100bn package of measures to tackle the downturn, the FTSE passed 4,000 points for the first time in six weeks. Alongside this was Nicolas Sarkozy's drive to crack down on tax havens and a call for the G20 to endorse a list of jurisdictions which were not in compliance with existing standards on transparency - in the end the G20 only 'took note' of the OECD list but nonetheless, those who were on the white list took no time in celebrating the fact.  For others, notably Switzerland which has had its fair share of scrutiny from the US during the year, it was a mad scramble to make it to the magic number of 12 signed agreements. Indecent haste to call off the dogs or evidence of a genuine commitment to transparency?

Time will tell but the movement between the list as published on 2 April and that contained in an update from the OECD in a list dated 28 September 2009 (link below) makes for interesting reading.  Unsurprisingly, the general movement has been upwards.

The 'bad boy' list of jurisdictions which had committed to the internationally agreed standard but had not yet substantially implemented it has shrunk.  The key jurisdictions moving up the chart from 'grey' to 'white' status are Aruba, Bahrain, Bermuda, BVI, Cayman Islands, Monaco, Netherlands Antilles, San Marino, Austria, Belgium, Luxembourg and Switzerland. Newcomers, straight in to the white list are Estonia, India, Israel and Slovenia.  There are now no jurisdictions which have not now committed to the internationally agreed tax standard.

That is only part of the story - there remains a significant rump on the grey list, some of whom have made progress, others who have not. A compare and contrast exercise is very revealing.

In terms of action on the ground, the G20 is focusing on:

- Developing a robust peer review process

- Engagement with developing countries

- Monitoring agreements

As predicted by many commentators at the time, the hare is now in front of the dogs and the operator is picking up the pace.

Click here to view the current OECD list which also contains a link to the original listing: http://www.oecd.org/dataoecd/50/0/43606256.pdf  

Ed Shorrock is the Director of Forensic & Regulatory Services at BakerPlatt (www.bakerplatt.com), an offshore law firm specialising in litigation, financial crime, regulatory and insolvency matters.  Ed has been heavily involved in a variety of regulatory, criminal and civil actions with a focus on the restraint, custody, realisation and confiscation of assets. Having qualified as a chartered accountant in 1998, Ed has managed a range of projects involving asset seizures under drug trafficking and criminal legislation and been involved in regulatory investigations and complex liquidations. He delivers on training programmes focusing on financial crime and compliance issues and is a regular speaker at conferences on these topics and how they affect offshore financial centres.

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