Switzerland, Andorra, the Cook Islands and Samoa have been singled out in an
Organisation for Economic Cooperation and Development report (OECD) for
still applying a restrictive ‘dual criminality’ principle in swapping
sensitive tax information with other governments.
In a comprehensive report on tax havens, the OECD notes that Switzerland, a
member government, has also not adopted a common definition of tax fraud, which
was drawn up for members to deal with these problems. Under dual criminality
rules, governments refuse to hand over data, where they think a foreign customer
a bank in its jurisdiction would be behaving legally in its own domestic
system – even if their home country considers them guilt of tax fraud.
Luxembourg is the only other OECD country not adopting the organisation’s
tax fraud guidelines, but it does not operate a dual criminality system.
Overall, however, the report lauds tax havens, saying they are cleaning up
their act regarding transparency and honest practice. ‘Most have entered
into double taxation conventions and/or tax information exchange agreements,
and many are engaged in negotiations for such agreements’, said the report,
which gives detailed notes on the banking secrecy status of 82 OECD and
A key issue, it said, was that no OECD countries and few
non-OECD economies now insist that a bank customer pay tax locally to
respond to a foreign request for information.
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