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G-20 Action Against Tax Havens May Be Slow Coming
By Matt Squire
printPlans by the Group of 20 to put an end to tax haven abuse could take up to ten years to implement, and will face political challenges, say international tax experts. The G-20 released a communiqu?© on Thursday announcing $1.1 trillion in committed funding for the International Monetary Fund, and calling for action, including possible economic sanctions, against governmental jurisdictions that allow tax evaders to hide their assets. "The era of banking secrecy is over," read the communiqu?©. But ending bank secrecy in jurisdictions that house enormous wealth will be easier said than done, as G-20 members must now contend...
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Many tax havens have done the bare minimum to remove themselves from an intergovernmental group's list of regulatory-lax jurisdictions, at times only signing tax treaties with other bank secrecy countries.
An international watchdog group said Friday that it will respond to Group of 20 calls for the reinstitution of a blacklist naming jurisdictions with weak anti-money laundering controls.
France's decision to shut down French banks in jurisdictions on a European Union tax haven blacklist will likely be mirrored by other countries, according to tax analysts.
An intergovernmental anti-money laundering watchdog should restore a blacklist of countries that don't comply with its international standards by February, Group of 20 members said Friday.
The Obama administration's plans to curb foreign institutions from aiding U.S. tax evaders is short on details, but could block U.S. citizens and residents' access to foreign banks and put a new compliance burden on U.S. institutions, say some tax professionals.
The White House called on lawmakers Monday to draft legislation that would curb the use of offshore tax havens by financial institutions that do business in the United States.
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The authors of the Stop Tax Haven Abuse Act are trying to charge FinCEN with duties the agency has shown no appetite for, according to guest writer Bruce Zagaris of Berliner Corcoran and Rowe, LLP.
Five bank secrecy jurisdictions have acquiesced since Thursday to international calls for them to loosen privacy rules that allow tax evaders to hide their assets from governments, according to tax consultants and media reports.
International pressure on bank secrecy havens, including Switzerland and Lichtenstein, is prompting tax evaders to move their assets to Middle Eastern and Asian countries, say economic analysts.
The Senate bill would authorize financial sanctions on designated tax havens.