The alliance of five European finance ministers paid. After their meeting Friday in Washington, the central bankers of the G20 agreed on responses to following the scandal of “Panama Papers”. “Improving transparency on the beneficiaries (…) is vital to protect the integrity of the international financial system and prevent the use of these entities for the purposes of corruption, tax evasion, terrorism financing and money laundering money “, ministers agreed.
to simplify to the extreme, the twenty central bankers believe that all countries of the world have to adapt their legislation to the standards defined by the organization for Economic Cooperation and Development (OECD). For one, all will have to adopt the Automatic Exchange of Information for Tax Purposes. On the other hand, all have the obligation to keep records of the ultimate beneficiaries of front companies, trusts or foundations and exchange information they stand, with all tax administrations.
Blacklist
All the world’s countries are expected to sign the Multilateral Convention on Mutual Administrative Assistance in tax matters OECD. G20 ministers also asked the International Organization “to establish objective criteria for identifying non-cooperative countries” by their next meeting in July. A blacklist will therefore be developed on that basis. Ministers looked forward to the next report of the Global Forum on Transparency and Exchange of Information for Tax Purposes – the Global Forum – comprising 133 countries responsible for assessing compliance by each member of legislation on cooperation and fiscal transparency.
on April 14, according to the Forum, only two countries remained as uncooperative (Bahrain and Panama) in terms of the automatic exchange of information.
Still, the noose will tighten even further: to date only 98 countries have committed to implement the automatic exchange of information by 2017 or 2018. the demands of European G5 countries (Germany, Spain, France, Italy, United Kingdom) in a letter to their G20 counterparts on Thursday were therefore satisfied.
“Great satisfaction”
“We want lists that allow to implement sanctions for countries that do not respect the rules, “had explained the french minister Michel Sapin. The latter showed his “great satisfaction” at the outcome of the meeting of ministers. “It is the determination of Europeans who helped get things,” he commented, adding that the G5 countries had received support from many other countries, citing as Australia or the Indonesia.
“Nobody could resist the blast caused by the scandal of Panama Papers”, he noted. “The outcome of the G20 finance resets gasoline in the engine”, was welcomed to his hand Pascal Saint Amans, Director of Tax Policy Center and Administration of the OECD.
the battle is not won so far
Still, “the discussions were frank,” said a close case . Particularly with the US and China very reluctant to want to establish a list of non-cooperative countries. “The Chinese said they had not solved the problems they may have with Hong Kong or Macao namely citing to pressure them on fiscal transparency,” said under cover of anonymity a senior official. Furthermore Beijing, where the case of “Panama Papers” does not officially exist, issues related to money laundering are handled directly in a cell of the Chinese Communist Party, which makes difficult the Chinese legislative adaptation international standard.
“The United States, meanwhile, have nothing against front companies, they told us, that is if the tax administration knows who owns” , said a close case. Delaware except that it is possible to mount a shell company without knowing who owns the whether the person is not American, it does not carry on business in the United States and it do not pay taxes. But this possibility should disappear soon, “the US administration has promised to change the law without going through Congress by the end of the year,” said a source on condition of anonymity. G20 ministers are therefore reached the maximum of what we could expect from their meeting. They have given impetus to a fight against fraud and tax evasion. But the battle is not won so far.
Richard Hiault special envoy to Washington
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