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(English) Against the OECD attacks

By Eduardo Morgan Jr.

On September 29, Singapore held the Global Forum on Transparency and Exchange of Information.  Yet another hypocrisy from the OECD whose purpose is no other than to eliminate the competition in financial business and legal entities that countries such as Panama represent for the members of its Cartel.  In this Forum,  we will be subjected to trial in the Court they have given the flashy name of “Par Review”.

This Global Forum is the continuation of the one held in Mexico last year at about this same time and that motivated me to write to Jeffrey Owens, Director of the Tax Policy Center.  I transcribe certain parts of that letter, which he of course did not bother to reply, so that Panamanians get to know the OECD and not let themselves be deceived by their false pretension of being an “international organization that establishes mandatory economic and tax principles for all countries”.

 “The OECD is not a true international organization as are, among others, the International Monetary Fund (IMF), the World Trade Organization (WTO) and the International Maritime Organization (IMO). The OECD is no more than a club or cartel of 30 rich countries, whose objective – according to its by-laws – is “to help its member countries to achieve sustainable economic growth and employment and to raise the standard of living in member countries.” (The Economist magazine and Paul Krugman, Nobel of Economy and a columnist of the NY Times, call it the “rich countries think-tank”)

“One of the purposes of the OECD is to avoid the competition other financial centers, may pose for the OECD members, its partners, aided by technological advance. Thus, in the document entitled Improving access to bank information, the OECD states that the liberalization of the financial markets was promoted by them as “a response to the threat to financial markets posed by offshore financial centers. Such financial centers, in the 1960’s and 1970’s, attracted foreign financial institutions by offering a minimally regulated banking system and minimal taxation, at a time when technological advances made them more readily accessible”.

“The members of the OECD are largely responsible for the world crisis by neglecting to realize that the relaxation of their regulations would lead to harmful speculation with financial instruments. Therefore, they have now tried to cover up their responsibility with an insidious campaign, filled with fallacies against the so-called Tax Havens, which they have tried to blame for the disaster”.

“In the year 2000, the OECD members spoke of a Level Playing Field, a goal they did not achieve because of its absurdity; today, they have re-labeled it as “Transparency and Exchange of Information.” I transcribe the words of the Secretary General of the OECD, Mr. Angel Gurría: “What has happened is nothing less than a revolution. For decades it has been possible for taxpayers to hide income and assets from the taxman by abusing bank secrecy and other impediments to information exchange. What these developments show is that this will no longer be possible.”

“OECD members themselves have shown us that the whole purpose of this campaign is to prevent competition from other financial centers. Let’s see: The United States, the principal member and largest contributor (25%) to the OECD budget, is undoubtedly the largest Tax Haven in the world. This country, which has the wealthiest economy, is the safest place for investment. IT DOES NOT TAX FOREIGN PASSIVE INVESTMENTS. But that is not all: IT DOES NOT PROVIDE INFORMATION TO THIRD COUNTRIES ABOUT THESE INVESTMENTS.  And for greater guarantee of anonymity to its foreign investors, it enters into an agreement with foreign financial intermediaries, which is known as QUALIFIED FINANCIAL INTERMEDIARY, guaranteeing that NOT EVEN THE IRS WILL KNOW THEIR CLIENTS.  This is clear evidence that the interest of the members of the OECD is to get rid of the competition, not any issues related to taxes.”

“The foregoing confirms that the article The G20 and Tax Haven Hypocrisy  published by The Economist magazine in its March 26, 2009 issue was right on track. The Global Forum of Transparency and Exchange of Information is the summit of hypocrisy and another step in the conspiracy to eliminate financial competition”.

 “The OECD cannot go on with this agenda. On the contrary, it should follow the example of the USA and promote healthy competition, such as this great country has done. … This includes confidentiality vis-à-vis abusive governments, both for their tax rates and for their confiscatory policies.”

“Lastly, allow me to remind you that on July 9, 2008, the IMF, a true international organization and part of the UN system, integrated the OFFSHORE FINANCIAL CENTER ASSESSMENT PROGRAM with the FINANCIAL SECTOR ASSESSMENT PROGRAM (Public Information Notice (PIN) No. 08/82, July 9, 2008).”

“Since then, the IMF eliminated any discrimination between “Offshore” and “Onshore,” explaining its reasons as follows: “Typically, the assessments reviewed a jurisdiction’s compliance with supervisory standards in banking, and with the anti-money laundering and combating the financing of terrorism (AML/CFT), and where applicable also assessed compliance with supervisory and regulatory standards in the insurance and securities sectors. Adherence to all four international standards among OFCs was broadly comparable or better, on average, than other countries, reflecting the higher than average incomes of OFC jurisdictions”.

All these concepts are still valid and what is positive is that the USA seems to have put Mr. Gurría in his place. He is no longer parading around as a head of state and seems to have relented. The international press has made it public that the USA is a Tax Haven, not transparent, as well as its companies, which they promote globally (Forbes, The Economist, National Geographic).

The OECD will take yet another turn to avoid affecting its main partner. But it will continue with its Cartel policy. Our best defense is that we are a serious country, with institutions that are an example to other nations, namely, among others, our Financial Center, our Ship Registry and our Corporate System. Our government instead of bowing to the OECD should ignore it and promote the awareness of our reality.

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