Attempt by UK govt to plug tax hole...

["Jean-Francois Avon" <jf_avon@citenet.net>]

>From Caribbean Week, business section, updated Nov. 15 1998 (?)

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Global initiatives present challenges to BVI

BRITISH VIRGIN ISLANDS - Proposed initiatives created for "combating
harmful preferential tax regimes" could present special challenges to offshore
financial centres such as the BVI, Chief Minister, Ralph O'Neal has told the
Legislative Council.

While the BVI Government has been cooperative with the international
community in its "ambitious attempts to create a new international standard,"
he said he welcomes the offer of the British Government to appoint a UK
financed consultancy to ascertain the full implication the proposed initiatives
will have on overseas territories.

Initiatives arose from recommendations made by the Organisation of
Economic Cooperative Development (OECD) as well as concerns expressed
by the European Union, and the group of seven major industrialized
countries, the G7. In September, a seminar was held to sensitise the overseas
territories to the attitude of the international community, the UK
Government's resolve to tackle harmful tax competition, and its commitment
to work with the overseas territories to ensure that their concerns were
factored into the ongoing dialogue on the harmful tax competition. Both the
Director of Financial Services and the Financial Secretary represented the
BVI.

Of the concerns noted by the Chief Minister were OCED initiatives to counter
the spread to tax havens and harmful preferential regimes, and the creation of
an OECD list which classifies many countries including the BVI and other UK
overseas territories as tax havens.

He further noted "the fact that Luxembourg and Switzerland, both members
of the OECD, could choose to abstain from adopting the report and from
cooperating on the initiatives but still not appear in the OECD black list" is
viewed by some persons as "proof of some hidden agenda by ... the
industrialised world to reduce the attractiveness of offshore financial centres
for legitimate cross-border business."

"Our expectations of the new Labour Government are high. All we ask ... is
to help us to help ourselves and to ensure that the competition for cross
border financial services occurs on a level playing field," he added.

A special public sector/private sector task force has been commissioned to
brainstorm and develop the territory's response to the proposals. The Director
of Financial Services is the chairman.

Jean-Francois Avon, B.Sc. Physics, Montreal, Canada
  DePompadour, Soci�t� d'Importation Lt�e
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