WHILE commening on the
OECD guidelines on the common reporting standard for automatic exchange
of financial information, the Financial Transparency Coalition & the Centre
for Budget and Governance Accountability has said that the full version
keepsdeveloping countries
looking in from the outside.
Rather than offer a period of non-reciprocity, where developing countries
could simply receive financial data, the only mention of non-reciprocity agreements
is catered to tax havens.
“Recognition of the benefits of non-reciprocity provisions for tax havens
and not for developing countries is disappointing,” said Pooja Rangaprasad
of the Financial Transparency Coalition and the Centre for Budget and Governance
Accountability in Delhi. “Developing countries would potentially benefit greatly
from being able to receive information from developed economies and tax havens,
rather than the other way around.”
But it seems that nothing in the standard—right down to the cost of purchasing
the OECD document online—was put forth with developing countries in mind.
"Accessing
the document is a perfect illustration of why this process needs to include
low income countries from the start; it costs $73 to download the document
— not an insignificant sum for a cash-strapped government, and a prohibitive
amount for a citizen watchdog group,” said Porter McConnell, Manager of the
Financial Transparency Coalition. “It's hardly a convincing sign that the
automatic exchange standard is 'ready for implementation' or open to everyone."
OECD officials characterized the announcement as a move towards “a world in
which tax cheats have nowhere left to hide,” but the details present a different
picture. While a multilateral agreement for information exchange is one option
put on the table, the OECD leaves room for countries to opt for bilateral agreements,
opening the door to further exclusion.
Just as the scope of countries involved shouldn’t be limited, neither should
the types of illicit flows addressed with the data. The same system that helps
tax evaders keep their money out of reach also enables the corrupt and the
criminal to move money into anonymous companies and hidden bank accounts, perpetuating
the problem of illicit financial flows.
“Around a trillion dollars left the African continent in illicit flows over
the past thirty years. The only way sums like that can be brought back into
developing country economies, to create jobs and be taxed properly for roads
and schools, is by including developing countries in information exchange from
the outset,” said McConnell. “The current guidelines don’t do enough to upset
the old guard of financial secrecy, or challenge jurisdictions that have made
their millions through sheltering illicit money.”
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