(English) Letter to New York Times – March 14th, 08

Panama, March 14, 2008

Messrs.
New York Times
United States of America

Dear Messrs.:

I hereby refer to the editorial published on your February 25, 2008 issue (“Liechtenstein’s Friendly Bankers”), and to Carter Dougherty’s article dated February 27, 2008. The contents of these articles seem to indicate that The New York Times (“NYT”) supports the Organization for Economic Cooperation and Development (OECD)’s conspiracy against offshore financial centers.

The scandal that was orchestrated by certain European OECD member countries due to the revelations about certain deposits by German citizens in a bank in the Principality of Liechtenstein, revelations that were obtained through blackmail and other criminal actions, attempts to influence world public opinion by creating the impression that offshore financial centers are a danger to international financial stability. The “black lists” created by the OECD include countries (Liechtenstein among them) that the OECD labels as “non-cooperative” in matters regarding the exchange of tax information and, therefore, are deserving of punitive measures. The OECD maliciously confuses the laundering of funds originating from horrible crimes (which, as such, are internationally prosecuted), with the domestic legislation of countries with which they determine their fiscal system and tax rules, both of which are the inalienable prerogatives of every State.

It would appear that the NYT is unaware of the fact that the United States, principal member of the OECD, does not tax interests earned on deposits held by foreigners in its own banks and stock exchanges or capital gains on investments from foreign investors, and does not supply information to any country – with the exception of Canada – on the identity of such deposit holders and investors. Those bank deposits, plus the investments in stocks and bonds in the United States, are estimated to amount to approximately 11 trillion dollars.

The tax competition in which the United States engages is perfectly legal and acceptable under International law and practice. What the OECD is attempting to do is to eliminate competition from the so-called offshore financial centers, in order to favor its European members, mainly those characterized by their abusive tax regimes. Its largest hurdle has been precisely the U.S., whose great economic development is based on free enterprise and free competition. (If the NYT wishes to delve further into this issue, it can refer to the document titled Improving Access to Bank Information, on the OECD website (www.oecd.org), especially paragraphs 36, 37 and 38).

Finally, it is worth wondering what the reaction of the American people and its government would have been if a felon had stolen information from banks and/or other financial institutions in the U.S. in order to sell it to European countries, including Germany? Would Germany have dared criticize the U.S. because it allows German nationals to hold accounts in its banks or invest through its stock exchanges? Would the German Chancellor have threatened to isolate the American government from Europe unless it obliges to change its banking secrecy rules?

Very truly yours,

Eduardo Morgan Jr., former Ambassador of Panama to the U.S.