January 5, 2001; Friday
SECTION: Financial pages
HEADLINE: Commonwealth countries ready to protect lucrative tax havens
BYLINE: EILEEN McNAMARA
DATELINE: SAN JUAN, Puerto Rico
Commonwealth countries are banding together to protect their lucrative offshore banking industry at a meeting with the international organization that blacklisted many for
''harmful tax practices.''
Members of the Commonwealth, a group of former and current British colonies, and the Organization of Economic Cooperation and Development will meet in Barbados on Monday and Tuesday.
Twenty-six of the 35 countries listed on the OECD blacklist are associated with the Commonwealth, including 15 Caribbean islands and territories.
''Many of the world's offshore financial centers are located within the Commonwealth, and the sector remains an important source of economic output and employment for those countries,'' the
Commonwealth said in a statement from London on Wednesday.
Many Commonwealth countries already have passed tougher laws to fight money laundering in the offshore sector, but have fought the tax havens blacklist, suggesting that the OECD's wealthy member
countries are only trying to stamp out competition for business investment.
Leaders of Caribbean countries said they will ask the World Trade Organization to intervene in the dispute over their no-tax and low-tax systems, which they argue are needed to offset
globalization's ill effects on their fragile economies.
The host country, Barbados, is also on the tax haven list. Prime Minister Owen Arthur will lead the meeting.
A conservative U.S. lobbying group is advising leaders to wait before enacting any tax reform, hinting the incoming administration of George W. Bush might withdraw support for the OECD
The U.S. Center for Freedom and Prosperity said Thursday it will meet with leaders of blacklisted countries to alert them the United States may change its views on demanding tax reform.