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(English) Panama, The OECD, And The United States

By Eduardo Morgan Jr.

For reasons that are easy to understand since they are the product of misleading    publicity, in our country there is the erroneous perception that the OECD (Organization for Economic Co-operation and Development) is the international organization responsible for setting the international fiscal rules that include transparency and the effective exchange of information between states.  Nothing could be farther from the truth.  The OECD, a club, an association of rich countries, a think tank, as it is referred to by Paul Krugman and The Economist magazine, is financed by its 32 members, of which the U.S.A. contributes with 25% of the organization’s budget and this gives it the right to set the organization’s policies.  Its 2500 employees are dedicated to producing economic studies for the benefit of its members, and, based on these studies, they develop models that in turn foster the exchange between the economies of its members.  These models include those that refer to the Agreements to avoid Double Taxation.  Among its policies there are also those intended to avoid that third-party countries compete with its members in financial activities.  This I affirm because it is so stated in a document which the OECD made public in the year 2000, (it was a secret) in which they stated (in an unconscious manner, perhaps inadvertently) the following: GLOBALIZATION AND THE LIBERATION OF THE FINANCIAL MARKETS

36. One of the elements which has propelled globalization during the past decade has been the liberation of the financial markets, a trend which has been fostered by the OECD.  This liberation was in part a response to the threat to the financial markets which the foreign Financial Centers representedDuring the decades of the 1960’s and 1970’s said financial centers were capable of attracting foreign financial institutions offering a banking system and a minimally regulated tax system at a time during which the technological advances made them easily accessible.  As capital flowed towards these foreign financial centers, threatening to undermine the traditional financial markets, a number of regulatory reforms were undertaken to level the playing field between the local banks on the one hand and the foreign banks on the other. (1) Exchange controls were eliminated.  Some countries established markets to compete directly with the foreign financial centers.  In addition, efforts where made to harmonize the regulation of financial markets on a global basis.


This is the reason for their war against competing countries, which they qualify as fiscal heavens, which also explains the creation of the much-publicized black, grey, and white lists. The process began with a call for universal collaboration to avoid harmful fiscal competition and they persuaded the non-member countries to commit to obeying the rules to avoid it, to the detriment of the legitimate revenues of other States. The OECD visited Panama, at the time a visit of subtle persuasion, and as a consequence our government agreed to be a part of this commendable initiative. Thus the letter dated April 15, 2002, which, very intelligently, was conditioned to what in English is called a Level Playing Field, that is, the same conditions for everyone. This letter from Panama has been portrayed by the OECD as a “commitment”, and many of our public sector officers, in the past government as well as in the current one, have believed that, effectively, Panama has a “formal” commitment with the OECD, to reform its laws as the latter demands; and in the event that we should fail to do so, we would be incurring in international transgressions subject to sanctions imposed by the remaining countries of the world (black, grey, and white lists). For those of us who have studied international law, and to those who without being lawyers have the degree of culture to know how States conduct their affairs, this is no more than laughable.  In respect of this subject, the Panamanian State has not entered into “any international commitment” with any other State, nor with any of the true international organizations of a multilateral nature of which we are a part by virtue of the relevant legal instruments.  Should the OECD and the Panamanians which support their statements be right, an Agreement would have had to be negotiated. This “agreement”, in keeping with the usual proceedings, after having been signed by the Foreign Affairs Minister or by whoever represented Panama at the time, must be presented for approval to the National Assembly, become Law of the Republic, and promulgated in the Gaceta Oficial.

The United States of America has utilized the mechanisms and instruments of the OECD, to pressure governments with the argument of the black, grey, and white lists, and to convince Panama so that we finish ceding to them our fiscal sovereignty. This is nothing new and they have been trying to do this for over 25 years. On this occasion we trust that the current government will follow in the footsteps of ex president Guillermo Endara, who with dignity and patriotism rejected the unjust objectives of the United States.  We hope all of the government officers and advisors entrusted with this subject are conscious of what the entire universe knows: that the fiscal heaven by antonomasia – and furthermore not transparent since it provides fiscal information to no one, except Canada – is the United States.  And that in ceding our fiscal sovereignty, the negative consequences to our financial center will benefit Miami’s financial center in equal proportions.

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