Carta al Editor del Financial Times

February 29th, 2008

To the Editor of Financial Times:

I make reference to the article “A Tax haven that needs to clean up its act”, published in your February 20, 2008 issue, whose author is Mr. Angel Gurría, Secretary General of the Organization for Economic Cooperation and Development (OECD). It captures the attention that in said article Mr. Gurría employs a language that seems to be drawn from the crudest phase of the colonial period of the XIX and XX centuries, in order to threaten small countries that compete with OECD partners in the financial sector.

It is unacceptable that the official that represents an organization that group together the 30 most prosperous and, supposedly, most civilized and democratic countries in the planet, including the United States, the United Kingdom, France, Japan, and Italy, would use, in as reputable a journal as the Financial Times, expressions such as: “It is time for the governments of countries where such practices are prevalent to accept their responsibilities and crack down on them – or face the consequences.”

Mr. Gurría, maliciously, confuses money laundering of funds originating from abominable crimes, which, as such, are internationally prosecuted, with the internal legislation with which countries determine their fiscal system and tax rules, inalienable and unquestionable prerogatives of every State. But perhaps even more reprehensible in the above referenced article is the accusation  directed against countries that he calls uncooperative tax havens, as well as against all those who would not sign treaties for the exchange of tax information with OECD member countries – that such countries have laws and regulations that facilitate tax evasion by taxpayers from third party countries. And this is because Mr. Gurría is well aware that the countries that facilitate tax evasion by foreigners the most are, precisely, the two most important OECD countries: the United States and the United Kingdom. Just how significant can foreign deposits in Liechtenstein and other small financial centers be compared to the trillions of anonymously-invested dollars, none of which pay taxes, in the banks and stock exchanges in the United States? What does Mr. Gurría have to say about the “non-dom” special residence offered by the United Kingdom for very wealthy foreigners, so that they may live in the UK without paying taxes or disclosing their enormous assets to anyone?

The article on which we are commenting is part of the OECD conspiracy to eliminate competition from the Offshore Financial Centers (see paragraphs 36, 37, and 38 of the document titled “Improving Access to Bank Information” (www.oecd.org), which was planned and put into motion fearing the competition made possible by the technological revolution. Competition should not be contested through outdated policies, nor through the making up of crimes that are not so. The way to compete is through better service and, above all, recognizing that competition in tax matters benefit taxpayers and, therefore, the world economy. Ireland is a good example.

Very truly yours,

Eduardo Morgan, Jr.

Former Ambassador of the Republic of Panama to the United States