Carta al Secretario General de la OCDE

Panama, October 6^th, 2009
Mr. Jose Angel Gurria
General Secretary
OECD

Dear Mr. Gurría:

The global economic crisis, which was provoked by the bad regulation of financial markets and that has already caused millions of job losses throughout the world (there are already more than 15 million in the U.S.), has united the world powers, including so-called emerging countries, in designing strategies to facilitate ending the crisis and returning to economic growth, to the benefit of all humanity. This would allow them to take advantage of the opportunities presented by globalization to improve the extreme poverty situation that, right now, afflicts an astoundingly high percentage of the mankind.

Accordingly, it is shameful that the OECD, instead of joining in this effort, chooses to persist in its wrongful and hypocritical policies of directing unfounded and ridiculous attacks towards those that it, capriciously and unreasonably, labels as uncooperative tax havens. We cannot understand your statements regarding the G20 meetings, which we copy below:

“What has occurred is nothing less than a revolution. For decades, taxpayers found it possible to hide their incomes and assets from the tax authorities through the abuse of banking secrecy and other impediments to the exchange of information. What these events reveal is that this will no longer be possible”.

You, Mr. Gurría, cannot ignore the fact that the United States, the main member and largest contributor to the OECD Budget (25%) is the largest tax haven in the world. This country has the wealthiest economy, is the safest place for investment and, furthermore, DOES NOT TAX FOREIGN INVESTMENTS IN ITS ECONOMY. This, and you must accept the obvious, places it within the category of a Tax Haven, as defined by the OECD definitions. But this particular Tax Haven is, additionally, NOT TRANSPARENT, (again, according to OECD definitions), not only because it does not furnish information to third party countries regarding investments made by their taxpayers, but also because it enters into QUALIFIED INTERMEDIARY AGREEMENTS with financial intermediaries, guaranteeing their clients that their identity will not be known even by the IRS. In other words, the U.S. not only does not furnish information, but is unable to do so, because it does not have it.

This confirms that The Economist (03/26/2009) was correct when it stated that behind the pressures from the OECD what lies is a great hypocrisy, to what I add that what is hidden is the OECD’s interest to eliminate the competition for their Cartel members in financial businesses. Panama is not a Tax Haven. We do not have tax laws benefitting foreigners over nationals; the banking center is of a size that conforms to our economy (US$46B in deposits) and our importance in the region. Unlike many jurisdictions, Panama does not serve as an intermediary to OECD countries for their banks and companies to create structures to minimize their tax exposure or avoid regulations enacted by their countries. Panama is a true regional financial center due to our geographical position, the Canal, its modern ports in both seas, its 5 global optic cables, its aerial hub, the most important in Latin America, its modern tax system, its proven democracy, a harmonious and non-discriminating society, and the fact that it is free of natural catastrophes. Additionally, it has First World-quality human resources, as it has been largely demonstrated in the efficient operation of the Panama Canal. The dependability and sound management of our financial center has been rated as excellent by the IMF which, unlike the OECD, is a true international organization.

The OECD should not continue with its agenda of threats and discrimination, all of which are contrary to International Law and to the World Trade Organization (WTO) agreements. It should also stop making a fool of itself with its obnoxious demand for the 12 information exchange treaties, as a condition to be excluded from its lists. It should, for sure, explain to all countries and jurisdictions that it threats, the reason why its main partner is not a Tax Haven and, furthermore, non-cooperative.

If it does not find any logical explanation, it should then follow the policies of that great country, the foremost military, economic, and scientific power in the World, and recommend that the worldwide economy and taxpayers from all countries would be better off under a regime of healthy tax competition, much like the one that reigns in the United States.

Very truly yours,

Eduardo Morgan, Jr.

Former Ambassador of Panama in the United States of America