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The battle for tax competition, financial "The battle for tax competition, financial privacy, and fiscal sovereignty is not over. The US's position is under assault by European bureaucrats here in Paris. We are concerned that they may implement their same goals under the guise of increased transparency and data exchange," said Center for Freedom and Prosperity President Andrew Quinlan. Today the Center for Freedom and Prosperity joined a broad coalition of 43 organizations by signing a letter to U.S. Treasury Secretary Paul O'Neill, which raises privacy concerns about the Organization for Economic Co-operation and Development (OECD) and Financial Action Task Force (FATF) proposals. The letter was circulated by J. Bradley Jansen, deputy director of the Center for Technology Policy at the Washington-DC based Free Congress Foundation. Free Congress' Brad Jansen said, "If the OECD and FATF were successful, minorities and individuals that are discriminated against or persecuted by oppressive governments will not have safe havens. Financial privacy gives individuals a way to safeguard their civil liberties--and maybe even their lives." Brad Jansen added, "This type of controversial government-mandated spying is an Echelon-type system for financial transactions and is open to the same types of abuse." Both Quinlan and Jansen are in Paris, France monitoring the OECD annual Ministerial meeting. They can be reached for comment at 06.68.81.94.47 (Paris), or by email at quinlan@freedomandprosperity.org and Bjansen@freecongress.org. ### _________________________________ A Complete copy of the letter is below:
May 15, 2001 The Honorable Paul H. O'Neill Dear Secretary O'Neill, The undersigned organizations, representing a diverse and broad cross-section of American society, are concerned that the Administration is not adequately safeguarding privacy in the context of certain international initiatives in the area of investigations regarding financial crimes. Specifically, we are concerned that the proposals of the Organization for Economic Cooperation and Development (OECD) and the Financial Action Task Force (FATF) for increased bank reporting on customers do not respect our financial privacy. We recognize your increased concern for the tax implications with the OECD and the FATF but are concerned that you have not made privacy a sufficient priority. The current proposals of OECD and FATF attempt to institute the popularly rejected "Know Your Customer" financial regulation, thereby sidestepping the domestic legislative process. We are concerned about the attempt to get Know Your Customer adopted as an international "best practice" under the guise of increasing transparency. Over 300,000 citizens filed comments against the Know Your Customer proposal under the Clinton Administration. We are disappointed that the Bush Administration continues to pursue an approach that Larry Lindsey has described as ineffective: 99.999% of all Currency Transaction Reports filed are on law-abiding citizens going about their normal business. The Suspicious Activities Reports' approach discriminates against the poor, as well as racial and ethnic minorities. The OECD and FATF's campaigns against banking secrecy and "harmful tax competition" are problematic for several reasons. This approach undermines the public confidence between individuals and their financial institutions, accountants and lawyers. These policies would likely distort capital inflows to the United States and could act, effectively, as capital controls. Economic dislocations to affected countries could lead to unintended political, foreign policy and immigration concerns. Our modern economy requires a liberal capital policy that engenders the consumer trust that comes with respect for privacy. We strongly urge you to make a clear statement instituting policies that respect financial privacy and that the Treasury Department opposes the type of reporting requirements being advanced by the OECD and FATF. Respectfully, |
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