Battle hots up between offshore centres Leading Industry and Investor News web site defines the bat

July 8, 2009 - PRLog -- The battle for business between international financial centres has started to heat up. The focus is the lists of tax havens, published for the global standard-setter on tax, the Organisation for Economic Cooperation and Development (OECD). According to leading industry website BusinessIFC.com, this contest will intensify during July.

BusinessIFC.com says that the list which the OECD has issued divides financial centres into white list and grey list jurisdictions. The white list includes what the body calls committed and compliant centres – those are internationally respected.

The grey list is sub-divided into tax havens and other financial centres. Grey list jurisdictions, by definition, are not compliant with international standards on tax transparency.

The lists have been updated regularly since they were first published on April 2. The latest revision was on July 3. Only one centre has so far made the leap from the grey list to the white list – Bermuda. The British Virgin Islands (BVI), the Cayman Islands and Bahrain are now very close to meeting the OECD benchmark of 12 tax information exchange agreements (TIEAs) signed. This, says the OECD, demonstrates proven commitment to open and transparent dealing.

BusinessIFC.com reports that a dark horse has emerged. Luxembourg, which had signed only two agreements recently, has now delivered ten. This must indicate, says BusinessIFC.com, that Luxembourg has a strong chance of meeting the requirement. However, Cayman has been told by OECD secretary general Angel Gurria that 12 TIEAs may not be enough to qualify. It will also need to undergo peer review before it can make the transition to the white list.

Jersey, Guernsey, the Isle of Man, Barbados, Cyprus, Ireland, Malta, Mauritius, the UAE (including Dubai) and the Seychelles were already on the white list in April. Several of these centres have been lobbying heavily for new business on the basis that they are identified by the OECD as top quality and regulatory compliant jurisdictions.

For example, Jersey has been promoting its new foundations which are available from July on the basis that it is white listed while the two key existing centres for foundations – Liechtenstein and Panama – are both grey-listed and show no likelihood of being white-listed in the foreseeable future.

BusinessIFC.com has been told by various Jersey law firms that significant numbers of high net worth individuals and family offices have said they will migrate their foundations to Jersey as soon as they are available. One senior lawyer said: “Family offices, in particular, do not want the potential hassle of being associated with grey list centres.”

Guernsey is also planning a foundations product. The new vehicle will be ready for approval by the States of Guernsey before the end of 2009. It will then need UK Privy Council approval.

BusinessIFC.com is also aware that the Channel Isles have been lobbying for companies based in grey list centres to move to their corporate registries. Ireland has also been winning a long term campaign to relocate corporate headquarters to Dublin. In recent months, Dublin scored significant victories over Bermuda. This may be mitigated by the fact that Bermuda is now white-listed.

The OECD list was originally requested by the G20 group of large states. It has set a timetable which means that all centres included on the white and grey lists will be reviewed at its November meeting.

It has threatened that if states do not demonstrate evidence of either compliance or a profound willingness to comply, they could face stringent fiscal sanctions. The OECD outlined these sanctions to BusinessIFC.com. If imposed, they could deliver devastating blows to the economies of some offshore centres.

So far, 25 grey-listed centres have not signed a single TIEA. A further six have initialled only one each.

BusinessIFC.com is a leading site for industry professionals and investors. It covers wealth management, taxation, private banking, funds, captive insurance, trusts, companies, shipping and real estate. It also provides comprehensive coverage of regulatory and legislative changes in more than 50 jurisdictions.

For more information please visit http://www.businessifc.com

Press Release Submitted by:
http://www.kronikmedia.co.uk

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BusinessIFC is a media platform with a website, email news and feature letters and an annual report.