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The Guardian

Saturday March 3, 2001

The Guardian

OECD accused of tyranny:
Caribbean leader alleges double standards at taxhavens talks

Mark Atkinson

Talks between rich industrialised nations and Caribbean statesdesigned to clean up the offshore financial industry appeared tobe heading for deadlock last night after Owen Arthur, primeminister of Barbados, snubbed a dinner held in his honour andaccused the Organisation of Economic Co-operation andDevelopment of "technocratic tyranny".

     With little hope of a breakthrough in the increasingly bitterdispute, it now appears likely the OECD will be forced to carryout its threat of economic sanctions against the Caribbeanstates.

     The talks at the OECD's headquarters in Paris, which followearlier meetings in Barbados and London, were meant to find amutually acceptable way of ending the climate of secrecy inoffshore financial centres so that rich industrialised nations cantrack down tax dodgers.

     The offshore centres agree on the need to overhaul their bankingsystems but argue that the OECD's threat of sanctions unlessthey comply with a rigid timetable, beginning with a publiccommitment by the end of July to reform, is high-handed andundemocratic.

     Sources at the meeting said Mr Arthur, who chairs theCaribbean Community, or Caricom, demonstrated his anger byfailing to turn up for a dinner held in his honour on the eve of thetalks. He then opened his address to the meeting by accusingthe OECD of "technocratic tyranny" by "nameless, faceless"people with "no common sense". "It was very, very tense," aninsider said.

     Mr Arthur went on to accuse the OECD of double standards byholding the Caribbean states to the July deadline while givingOECD members, Luxembourg and Switzerland, until 2003 to getrid of their own harmful tax practices without threateningsanctions in the meantime.

     "Is it because they are more powerful, or richer?" he asked. MrArthur is said to have added: "This may degenerate into apolitical fight. We are ready for it."

     OECD sources said the officials, including Britain's GabrielMaklouf, who chairs the OECD's committee of fiscal affairs,were appaled by Mr Arthur's behaviour and almost walked out."There was a point this morning when Arthur was talking wherepeople got very fidgety," an OECD source said. The sourceadded: "The OECD is looking for dialogue and cooperation, notrhetoric that is inflammatory and unhelpful."

     An OECD spokesman said that the discussions later overcametheir early difficulties and began focusing on serious andsubstantive issues, overunning their 5pm deadline in Paris.However, it remained unclear whether any agreement could bereached.


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