OECD Accused of Tyranny
Caribbean leader alleges double standards at tax havens talks
Governments should use whatever system of taxes is best for their people. But a group of high-tax countries is seeking to penalize low-tax countries rather than to correct their own unfair tax systems. A United Kingdom periodical called The Guardian is reporting on attempts by the high-tax OECD to set up an anti-competition tax cartel.
by Mark AtkinsonTalks between rich industrialised nations and Caribbean states designed to clean up the offshore financial industry appeared to be heading for deadlock last night after Owen Arthur, prime minister of Barbados, snubbed a dinner held in his honour and accused the Organisation of Economic Co-operation and Development of "technocratic tyranny".
With little hope of a breakthrough in the increasingly bitter dispute, it now appears likely the OECD will carry out its arrogant threat of economic sanctions against the Caribbean states.
The talks at the OECD's headquarters in Paris, which follow earlier meetings in Barbados and London, were meant to find a mutually acceptable way of ending the climate of secrecy in offshore financial centres so that rich industrialised nations can track down tax dodgers.
The offshore centres agree on the need to overhaul their banking systems but argue that the OECD's threat of sanctions unless they comply with a rigid timetable, beginning with a public commitment by the end of July to reform, is high-handed and undemocratic.
Sources at the meeting said Mr Arthur, who chairs the Caribbean Community, or Caricom, demonstrated his anger by failing to turn up for a dinner held in his honour on the eve of the talks. He then opened his address to the meeting by accusing the OECD of "technocratic tyranny" by "nameless, faceless" people with "no common sense". "It was very, very tense," an insider said.
Mr Arthur went on to accuse the OECD of double standards by holding the Caribbean states to the July deadline while giving OECD members, Luxembourg and Switzerland, until 2003 to abandon their own competitive tax practices without threatening sanctions in the meantime.
"Is it because they are more powerful, or richer?" he asked. Mr Arthur is said to have added: "This may degenerate into a political fight. We are ready for it."
OECD sources said the officials, including Britain's Gabriel Maklouf, who chairs the OECD's committee of fiscal affairs, were appalled by Mr Arthur's independent, pro-competition behaviour.
An OECD spokesman said that the discussions later overcame their early difficulties and began focusing on serious and substantive issues, overunning their 5pm deadline in Paris. However, it remained unclear whether any agreement could be reached.
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