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Listas Negras y Grises de la OECD, Competitividad Ejecutiva

To Eduardo Morgan Jr.

January 15, 2010


1. You have ample knowledge on the issue of Panama’s inclusion in the black lists of the OECD and gray lists of the OECD member countries, what can you tell us about this issue’s current status?

The OECD is not an international organization as is, for instance, the International Monetary Fund (IMF). It is in fact a Cartel of 30 wealthy countries, led by the United States (who provides 25% of its budget) and whose purpose is, among others, to prevent competition in financial matters for its partners, from emerging countries. At the beginning their attacks upon those they denominated  “offshore” financial centers were founded in the poor supervision those countries had over their banking and financial systems to prevent, among other things, money laundering. After showing the IMF that this was not true since the supervision in those countries was equal to or better than that in their Cartel’s members, they varied their strategy and then accused them of being hazardous Tax Havens and began to threaten them in order to force them to furnish information on taxes requested by its members. The thesis is that those countries have tax laws that help taxpayers of country members of their Cartel to evade taxes. That is the origin of the black, gray and semi-gray lists.

The big problem OECD has is that its main member, the United States, is without doubt the “Tax Haven” par excellence, something about which some organizations and countries are starting to complain about. Worse yet for the OECD is that it does not furnish information to third countries on the millions of dollars invested by foreigners in its economy. That is, IT IS NOT A TRANSPARENT TAX HAVEN.

The OECD keeps Panama in a gray list, which means that we are a country that, although it has agreed to change its laws to furnish tax information to third countries, it has not fulfilled its promise. Panama, from the beginning, I believe it was in 2002, joined the countries willing to follow directives from the OECD but within the framework known as “LEVEL PLAYING FIELD” that is, that the rules would apply for everyone. Yet, when the OECD failed to get the United States to accept furnishing information to third parties, the whole structure collapsed and then it started to use forceful language: “You do it because I say so”, with the threat of sanctions. These sanctions cannot be imposed by the OECD because it is not a real international organization, as the United Nations, which through its Security Council, can do so, when necessary, to preserve world peace and safety. This is not so for the OECD, that can only recommend its members to take measures. Of the OECD countries, only Spain and Mexico keep us in their black list. The other countries: Argentina, Brazil, and Ecuador have done so without , being members of the OECD, but  taking into account the “Tax Haven” rating it attributed us.

2. What is your opinion on the OECD’s decision regarding Panama?

I repeat, the OECD is not an international organization per se and even less can it impose sanctions. In the case of Panama, it has no grounds because Panama is not a Tax Haven as per the rules of the OECD itself. We are a Financial Center, very well regulated and with very good ratings in the examinations conducted periodically by the IMF. Our problem is that our country, as a Regional Financial Center (Latin America) competes with Miami and New York and that the United States is the leader of the OECD Cartel.

3. What is your knowledge about the strategy of the Panamanian Government to keep the country out of these lists? If affirmative, what is it?

As far as I know, our Government has decided to stand firm before the OECD in the sense that Panama will not sign any ignominious treaties on tax information. This consists of nothing less than renouncing to our tax sovereignty before third parties. This has been the constant pressure from the USA; since they first asked for it back in the 80’s, Panama has refused repeatedly to please them because of the negative impact this would have on our condition as an independent country and the damage it would cause to our financial center. Now they are setting it forth as a condition for the signing of the free trade agreement with Panama. Our Government – and here we have to congratulate the Panamanian Minister of Economy, Alberto Vallarino on this – has stated that it will only sign only treaties that prevent double taxation (DTTs); and it will do so with countries were are interested in because they have investments in Panama or with which Panama wishes to strengthen economic ties.

4. What is your opinion on this strategy?

It is the correct strategy. First, not to kneel before the OECD, rush into entering into 12 treaties for exchange of information as it has been done by the colonies and protectorates of the OECD countries. And second, because a double taxation treaty with a country that has investments in Panama is very positive for the foreign investor, as it will provide the assurance that the taxes paid in Panama will be recognized in his country of origin as well.

5. Is it true that the so-called tax havens are challenging the intentions of the OECD and therefore signing, on their own, treaties with some economies not linked to the OECD?

It is true, as I said in my answer to the previous question. Deep down this is nothing but a cruel joke and shows the ridicule the OECD and its partners have fallen into. They don’t know what to do to veer off attention from the huge world crisis being suffered by humankind because of the erroneous policies of the leading OECD countries in the financial field.

6. OECD members such as Spain are criticized because some of its private companies do, or intend to do, business with the Panama Canal Authority at the same time they follow rules of the OECD to pressure Panama. Is this true? What is your opinion?

The former government is at fault here because it failed to apply the Retaliation Law and it did not sue those countries before the WTO either. All those discriminations against Panama are not only unfounded but in violation of World Trade Organization rules. The Retaliation Law allows reciprocal measures meaning, “an eye for an eye, and a tooth for a tooth”. If Mexico or Spain impose special taxes or rates to remittances to Panama, we repay in kind. In this way, we would retain the same percentage to Spanish and Mexican companies operating in Panama, which are many and very powerful. The laws also allow for retaliation properly, such as it would be not allowing companies from those countries from participating in Government contracts in Panama, including those relative to the Panama Canal expansion. Had it been applied, I am sure that we would have been left out from black lists and would have been more respected as a country. It is comforting that the Government Plan of the current Administration includes application of the Law of Retaliation. Panama is a real country, with a real economy that includes a well reputed regional Financial Center. We are not a Caribbean little island that acts as a bridge for OECD countries to evade taxes.

7. How do you see the future of this Organization? Will it be able to continue exerting pressure on economies such as the Panamanian?

They are waging a war of nerves to frighten us and force us to give in. If Panama stands firm and ignores them; if we apply our laws to countries that discriminate us, and sue them before the WTO, nothing shall happen to us. Let us not forget that the OECD does not impose sanctions; but rather recommends its members to impose them on those countries they consider uncooperative Tax Havens. Its big problem, as it is often being reminded to it by countries as well as important international newspapers, is that its main member, the United States, is the Tax Haven par excellence and the least cooperative. It only provides tax information to Canada.

8. What message would you give to the Government of Panama on how to deal with this issue?

To apply the Law of Retaliation effective immediately; to continue its Double Taxation Treaty policy; not to give in to the game of the OECD, and not to forget that thanks to our behavior as a dignified country, we were able to gain full independence from the most powerful country on Earth. We cannot lose our Dignity even for a Trade Promotion Agreement (TPA).

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