May 1, 2001 

The Honorable Mark A. Weinberger
Assistant Secretary (Tax Policy)
1500 Pennsylvania Avenue, N.W., Room 1334 
Washington, D.C. 20220

Dear Mr. Weinberger,

     Financial Executives International's (FEI) Committee  on Taxation is writing to urge that in the upcoming OECD Ministerial  Discussions concerning so-called Harmful Tax Practices, the United States delegation not support any efforts to 'harmonize" national tax policies or  seek to regulate so-called "ring fencing."

     Financial Executives  International (FEI) is a professional organization representing the interests  of about 15,000 CFO's, Treasurers, Controllers and other senior financial executives in over 8,000 corporations throughout the United States and Canada. FEI's Committee on Taxation, which formulates tax policy, comprises  the senior tax officers from some of the nation's largest corporations, and  involves itself with taxation issues that affect U.S. corporations.

     We  recommend that the United States pursue policies which promote the  transparency of each nation's substantive and procedural tax laws as well as policies favoring controlled data exchange between national authorities, to promote mutual assistance in ensuring that national laws are not being  subverted. In this regard, the United States should pursue the same international norms in the taxation area as it does in the international trade and investment arena. We do not, however, favor proposals which would  seek to 'harmonize' the tax laws of member governments or to set minimum levels of taxation. Each nation must decide for itself how best to tax its citizens and businesses. While we favor transparency and exchanges of information, harmonization is not something which we can or should support  because it intrudes on a nation's sovereignty. Nor do we recommend that the  United States support international efforts to regulate so-called 'ring  fencing,' or related practices, in which one jurisdiction competes with  another for international business or investment based on the favorable tax  treatment which its laws accord to imported capital. So long as the tax inducements are open and transparent, it is good international economic  policy for there to be incentives for nations to keep their tax and regulatory systems as low cost and laissez-faire respectively because those types of policies stimulate international trade and investment.

     Thank you very much for your consideration of our views. We greatly appreciate your continued good work and leadership in the areas of economic and tax policy.  Please do not hesitate to call on us if we can be of assistance. If you have any questions about this matter, please contact Mark Rosen, Director of  Government Relations (202) 457-6204 or mrosen@feidc.org.

Sincerely,

Joseph O. Luby, Jr.
Chairman
Financial Executives International
Washington, D.C.

cc: Mark Rosen

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