British Prime Minister Gordon Brown has written to the UK’s offshore tax havens – including Gibraltar – warning them to meet international transparency standards within six months or face sanctions, reports the Gibraltar Chronicle.
Mr Brown told the jurisdictions to sign at least 12 bilateral tax information sharing agreements by November. But in his letter to Gibraltar Chief Minister Peter Caruana, Mr Brown also welcomed recent steps taken by the Gibraltar Government in this context.
PM Brown referred to a statement issued by the Gibraltar Government ahead of the G20 summit in London, in which Mr Caruana reiterated Gibraltar’s commitment to OECD standards. “The Prime Minister highlighted the fact that that statement was well received,” a Convent spokesman told the Chronicle.
Mr Brown also stressed the importance of the tax information sharing deal reached between Gibraltar and the US, and acknowledged that Gibraltar was in well-advanced negotiations with other countries. Last week, even before he had received Mr Brown’s letter, Mr Caruana said he was confident that Gibraltar would sign at least 12 agreements by November.
The latest developments follow the OECD’s recently-published progress report on tax transparency, in which it lists the efforts made by countries to ensure transparency.
Even though Gibraltar is fully compliant with EU legislation in tax matters, it was listed among the British territories and other countries described as ‘tax havens’ by the OECD.
Gibraltar, Anguilla, Bermuda, the British Virgin Islands, the Cayman Islands, Montserrat and the Turks and Caicos were all placed in a category listing 30 countries that had pledged to meet international tax standards but have yet to do so. In some cases, those pledges go back several years.
Gibraltar, which first expressed its commitment to meet OECD standards in 2002, has so far signed just one agreement to share tax information. The agreement with the US was signed a fortnight ago on the eve of the G20 summit in London, during which world leaders pledged to clamp down on financial centres where tax avoidance is common. The OECD published its report a day later.
Mr Brown’s letter last week, first revealed by the Financial Times, signals the UK’s intention to maintain pressure on its territories and keep the momentum going in the wake of the G20 summit.
Leaders at the summit agreed a range of sanctions that will be applied to financial centres that do not comply. Industry executives said that being blacklisted by the OECD would in itself be extremely damaging for any centre.
According to the FT, Mr Brown also sought to increase pressure on Jersey, Guernsey and the Isle of Man, three British territories that were placed on the OECD’s ‘white list’ after signing at least 12 agreements.
PM Brown praised their efforts but wants them to further increase transparency. He said he would urge the G20 to “raise the bar” if there was no clear improvement.
Mr Brown’s letter comes just days ahead of publication of an initial report on the UK’s offshore havens. Michael Foot, a former Bank of England director who was commissioned to write the report, will publish his interim findings on April 22.