OCED report on financial centres out soon

by Anthony Manduca

The Organisation for Economic Cooperation and Development, the club of 29 industrialised nations, will this month publish the names of centres it believes fall short in transparency and cooperation on tax evasion, the Financial Times has reported. Sources close to the OCED have told The Malta Business Weekly that Malta is expected to be given the clearance by the organisation and to be given a good overall report. This should counter any damage to Malta's image caused by last week's publication by The Financial Stability Forum of a classification of international financial centres, in which Malta was placed in a second category. This led to the heads of Malta's three financial authorities, the Central Bank, the Malta Financial Services Centre and the Malta Stock Exchange, to send a strongly-worded letter of protest to the chairman of the Forum.

The forum, a grouping of financial regulators, finance ministries and central banks, was created last year by policymakers from the Group of Seven leading industrialised nations to prevent a repeat of the Asian and Russian financial crises. It put Hong Kong, Luxembourg, Singapore and Switzerland in the top group. It also said Jersey, Guernsey, Isle of Man and Dublin, Ireland's "offshore" centre, were up to the same standard. Bermuda, Gibraltar, Macau, Malta and Monaco were in group two, needing remedial action to bring them up to standard.

The worst and third group included the Bahamas, Cayman Islands and British Virgin Islands - all in the Caribbean, Liechtenstein in Europe, Panama and Belize in central America and Lebanon in the Middle East.

Some experts were surprised at the way certain countries were not included in the first group. "One can only suggest that the criteria applied are extremely narrow and possibly over formalised," said Edward Troup, head of tax strategy at Simmons & Simmons, a UK law firm was reported having said in the Financial Times.