Published April 8, 2009

M'sia, 3 other countries off tax-haven blacklist

They've agreed to rules on financial openness: OECD

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(PARIS) Four nations will no longer be blacklisted as uncooperative tax havens after they bowed to pressure from world leaders and agreed to new rules on financial openness, an international organisation said yesterday.

Angel Gurria, head of the Organisation for Economic Co-operation and Development (OECD), said in a press conference that the Philippines, Uruguay, Costa Rica and Malaysia have been moved off the black list after they agreed to cooperate with international authorities.

'These four jurisdictions have now made a full commitment to exchange information according to the OECD standard,' he said. 'This is very important progress.'

Group of 20 (G-20) leaders meeting in London last week pledged to crack down on tax havens, reflecting the mounting concern that banking secrecy in tax havens has helped to worsen the economic crisis by disguising the true value of some global assets.

Anti-poverty activists say countries with banking secrecy provide corrupt officials with safe havens to stash illicit funds, often depriving poor nations of needed resources.

The OECD has divided countries into three categories: those who comply with rules on sharing tax information, those who say they will but have yet to act, and nations which have not yet agreed to change banking secrecy practices.

The four countries on the blacklist - the Philippines, Uruguay, Costa Rica and Malaysia - will now join countries such as Switzerland and Liechtenstein on a 'grey list' of countries that still have to implement their commitment to accept new information-exchange standards.

Potential sanctions for transgressors include extra audits of those who use tax havens and curbs on tax deductions claimed by businesses using the territories.

More than 30 offshore tax havens, from Britain's Channel Islands to the Cayman Islands in the Caribbean, are under increasing pressure to provide more information to international authorities to prevent people from evading taxes or hiding income by shifting money to such places. -- AP