Cayman on OECD's G20 list

(CNS): According to a number of global reports, the Cayman Islands is on the OECD list of countries considered to be uncooperative which it submitted to the G20 finance ministers on Thursday. Although this is not the final so-called ‘black list’ that may emerge from the G20 summit, the list comprises some 32 countries that the OECD simply described as non-cooperative financial places. (Left Secretary General Angel Gurria.)

More than 80 nations were reportedly surveyed for this new draft list, which may very well change during the course of the summit giving Cayman time to fight its case for removal. Nick Bray, a spokesman for the Paris-based OECD, has said that this was an informative list for the G-20. "Then it is up to them to decide what to do with it. We’ve provided names of countries and territories that are not providing information.”

Although the OECD praised recent moves by the Cayman Islands and other offshore jurisdictions like Singapore to improve communication channels, it does not appear to have saved either country from the pre-summit list.  "Moves by a number of financial centres over recent weeks have given a welcome boost to efforts to promote transparency and exchange of information on tax matters," OECD Secretary General Angel Gurria said in a statement.

The Cayman Islands has been reported in the UK to be the second most popular jurisdiction behind Jersey for UK banks to base subsidiaries that are considered to be used to avoid tax obligations.

Meanwhile, leading global charity Oxfam has joined the chorus for a clampdown on tax havens following the publication of a new report that suggests developing countries miss out on up to $124 billion every year in lost income from offshore assets held in tax havens. A new analysis conducted for Oxfam by James Henry, former chief economist at McKinsey & Co, found that at least $6.2 trillion of developing country wealth is held offshore by individuals, depriving those countries of annual tax receipts of between $64 to $124 billion.

The charity said that the scale of the losses could outweigh the $103 billion developing countries receive annually in overseas aid. And capital flight is a growing problem, with an additional $200 to $300 billion being moved offshore each year. Oxfam said it was calling for reform of tax havens and wider reform of the financial system to reduce volatility, increase accountability and give developing countries a greater say in the management of the global economy.

“Developing countries are losing billions of pounds every year that would provide a vital boost to their economies and could be spent on reducing poverty,” said Kirsty Hughes, Oxfam Head of Policy and Advocacy. “This money could pay for health and education services, for protection against the deepening impact of the economic crisis such as safety nets to help those who have lost jobs and for projects to protect poor people already affected by climate change. $16 billion a year would be sufficient to give every child a school place and $50 billion a year is needed to help poor countries protect their people from climate change.”