Contact Information:

Center for
Freedom and Prosperity
 P.O. Box 10882
Alexandria, Virginia 22310-9998
Phone: 202-285-0244
Fax: 208-728-9639

Office of the Secretary-General

28 February 2001

Statement by Commonwealth Secretary-General
on Document Related to Tax Talks

Commonwealth Secretary-General Don McKinnon has issued the following statement relating to discussions between the Organisation for Economic Co-operation and Development (OECD) and Commonwealth territories on cross-border taxation matters:

    I have seen what I believe is a minute of a meeting of the Fiscal Affairs Committee (FAC) of the OECD on the ongoing dialogue between that organisation and the Commonwealth.

    If this is a true and accurate record, I am extremely disappointed. The non-OECD countries have been holding discussions in good faith with the OECD on what the OECD calls "harmful tax competition".

    This minute clearly confirms the suspicion of many that the FAC not only writes the rules, but wishes to be the prosecutor, judge, jury and jailor. They are setting themselves up as the world's financial policeman.

    In two meetings involving the OECD and Commonwealth non-OECD members in Barbados in early January and London in late January the discussions had been frank and constructive. The outcomes of these discussions are important to the Commonwealth developing countries which the OECD has threatened to list as "unco-operative tax havens". For these countries, the fabric of their economies and their societies is at stake, which is why so much time and effort has been put into these talks to enable the OECD to understand their concerns. But it now appears that the OECD may have a different agenda.

    I can assure the OECD that the Commonwealth will not be "reined in" on this issue.

    Our members are all committed to adhering to the highest standards of fiscal probity. This was made clear at the 2000 Commonwealth Finance Ministers Meeting which requested regional and multilateral dialogue on the implications of the OECD proposals and mandated the Commonwealth Secretariat to facilitate this process.

    Several of our member countries' offshore financial centres (OFCs) were set up at the urging of OECD member countries and now they are being criticised. These OFCs would readily accept assistance or advice, where necessary, to help regularise practices which might be seen to be inappropriate.

    I am also concerned at attempts to denigrate Prime Minister Owen Arthur of Barbados. Prime Minister Arthur, the current Chairman of the Caribbean Community (CARICOM), co-chairs the Joint Working Group set up at Barbados and has invested, along with others, considerable effort to find consensus and has offered positive political concessions. This process was endorsed by Commonwealth finance ministers, so Prime Minister Arthur can indeed speak for the Commonwealth in this area.

    This minute suggests that the FAC is determined to obstruct genuine political dialogue. It clearly has the potential to derail the negotiations which lie ahead.

    My hope is that when the talks begin in Paris on Friday a more constructive position will be adopted.


Note to Editors

For further information, please call the Information and Public Affairs Division (Cheryl Dorall at +44 (0)20 7747 6379 or Mwambu Wanendeya at + 44 (0) 20 7747 6382) or the Office of the Secretary-General (Mischa Mills at + 44 (0) 20 7747 6130 or +44 (0) 7730 777879).

For information on the Joint Commonwealth-OECD Working Group which meets in Paris on Friday 2 March to further discuss the OECD initiative on what it calls "harmful" tax competition, please call Joel Kibazo at + 44 (0) 774 0450901.


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