1. 1 Information across borders Developments in Implementing Global Standards on Exchange of Information CFE Forum Thursday 15 April 2010 Brussels, Belgium By Dónal Godfrey, Head of Unit, Global Forum Secretariat Global Forum on Transparency and Exchange of Information for Tax Purposes Global Forum web site: www.oecd.org/tax/transparencywww.oecd.org/tax/transparency

2. TAX CO-OPERATION –A BRIEF HISTORY OECD has worked to improve transparency and exchange of information for many years – 1996 called on by G8 leaders to study the issues – Major report in 1998 – Tax haven list in 2000 – Model Agreement on Exchange of Information in 2002 – Article 26 Update/JAHGA Report 2005 – Global Forum (meetings/reports/standards) CFE Forum / 15 April 2010

3. THE STANDARDS-WHAT ARE THEY? The standards of Transparency and Exchange of Information: 1.Availability of information, accounting, bank and ownership information 2.Access to information 3.Exchange of information on request, e.g. DTC or TIEA – Standards contained in Model TIEA, Article 26 of Model DTC and JAHGA Report 3 CFE Forum / 15 April 2010

4. TIEAs Signed Annually 2000 - 2009 4 CFE Forum / 15 April 2010

5. WHAT HAPPENED? On 2 April 2009 the G20 agreed: “to take action against non-cooperative jurisdictions, including tax havens. We stand ready to deploy sanctions to protect our public finances and financial systems. The era of banking secrecy is over. We note that the OECD has today published a list of countries assessed by the Global Forum against the international standard for exchange of tax information” CFE Forum / 15 April 2010

6. PROGRESS REPORT In conjunction with G20 summit OECD Secretariat issued a Progress Report identifying: – Jurisdictions which are currently considered to have substantially implemented the OECD standard by having concluded at least 12 agreements to the standard; – Jurisdictions which committed but have not yet substantially implemented the OECD standard; and – Jurisdictions which have not yet committed to the OECD standard Progress Report is updated continuously CFE Forum / 15 April 2010

7. PROGRESS REPORT

8. WHAT HAPPENED NEXT? All jurisdictions committed to the standards 25 jurisdictions substantially implemented the standards since April 2009. 230 + TIEAs signed since April 2009, 140 in the past 6 months and 140 + DTCs revised or concluded including updated Article 26. Reservations to Article 26 by OECD countries and NOEs withdrawn CFE Forum / 15 April 2010

9. TIEAs/DTCs Signed with OECD/G20 Countries 9

10. More progress in the last year than in 10 years As stated by the G20 leaders “The era of bank secrecy (for tax purposes) is over”. OECD principles on transparency and exchange of information are almost universally accepted Result = Nowhere left to hide A YEAR OF UNPRECEDENTED PROGRESS CFE Forum / 15 April 2010

11. NEW CARDS! NEW GAME! NEW FORUM! Mexico, September 2009, more than 70 delegations agreed to: – Restructure the OECD Global Forum to expand its membership – Establish an in-depth peer review process to monitor and review progress towards full and effective exchange of information – Identify mechanisms to speed-up the negotiation of agreements and enable developing countries to benefit from the new, more cooperative tax environment. CFE Forum / 15 April 2010

12. THE NEW GLOBAL FORUM Global Forum established as a Part II program entirely financed by its members All members on equal footing Serviced by self-standing dedicated secretariat in OECD’s Centre for Tax Policy and Administration Initial 3 year mandate – to be reviewed after 2 years Work guided by: – Steering Group – 15 members – Peer Review Group – 30 members CFE Forum / 15 April 2010

13. MEMBERSHIP All OECD, G20 and other jurisdictions covered by 2009 Assessment invited as members. Other jurisdictions will be invited to participate with possibility of becoming members. Relevant international organisations invited as observers. CFE Forum / 15 April 2010

14. GLOBAL FORUM-NEW FOCUS- NEW METHOD Focus = implementation of the standards Method = Peer Review Not a numbers game - Reviews will examine quality of agreements, relevance of partners and effectiveness of EOI Impediments to effective EOI will also be identified CFE Forum / 15 April 2010

15. PEER REVIEW- Methodology All 91 Global Forum members have agreed to participate in the review process. 2 Phases: – Phase 1 will focus on legal framework – Phase 2 will focus on practical implementation (includes an on-site visit). In February 2010, the Global Forum agreed on the Terms of Reference, Methodology, Assessment Criteria and Schedule of Reviews. CFE Forum / 15 April 2010

16. PEER REVIEW - Methodology Reviews will be conducted by assessment teams of at least: – Two Assessors from Global Forum member jurisdictions; and – One member of the Secretariat Reports will be drafted by the assessment team. Jurisdictions will have the opportunity to comment on the reports Reports will be presented to the whole Global Forum for adoption and then published. CFE Forum / 15 April 2010

17. PEER REVIEW - Phase 1 (Legal Framework) The Terms of Reference divides the standards into 10 essential elements. Phase 1 reviews lead to a determination for each of these: – The element is in place. – The element is in place, but certain aspects of the legal implementation of the element need improvement. – The element is not in place. If crucial elements are not in place, a jurisdiction will not move to Phase 2 until it has improved its legal and regulatory framework. CFE Forum / 15 April 2010

18. PEER REVIEW – Phase 2 (Implementation) Each element will be rated: – Compliant (C): In practice, the element is fully implemented. – Largely Compliant (LC): There are only minor shortcomings in the implementation of the essential element. – Partially Compliant (PC): The essential element is only partly implemented. – Non-Compliant (NC): There are substantial shortcomings in the implementation of the essential element. Phase 2 evaluation will also include an overall rating of (C), (LC), (PC) or (NC). CFE Forum / 15 April 2010

19. PEER REVIEW SCHEDULE First tranche of 20 reviews launched on 1 March 2010 The second tranche of reviews (20 more) will begin in the second half of 2010 All Phase 1 reviews will concluded by 1 st half of 2012 and Phase 2 by 2014 Some jurisdictions have combined Phase 1-2 review (long standing commitment to standards, adequate treaty network and EOI history) CFE Forum / 15 April 2010

20. NEW GLOBAL FORUM -Speed-up Mechanisms COE/OECD Convention on Mutual Administrative Assistance in Tax Matters OECD Multilateral TIEA Multilateral Negotiations CFE Forum / 15 April 2010

21. OUT WITH THE OLD – IN WITH THE NEW “Era of bank secrecy is over” A new era of transparency has begun All country support – Progress Report has no uncommitted jurisdictions Change has happened (25 jurisdictions moved to “substantially implemented” category) Others are also moving, e.g. Cook Islands 11 agreements Peer reviews will ensure implementation 21 CFE Forum / 15 April 2010

22. MORE INFORMATION Global Forum on Transparency and Exchange of Information for Tax Purposes www.oecd.org/tax/transparency and Centre for Tax Policy and Administration work on Tax Evasion www.oecd.org/tax/evasionwww.oecd.org/tax/evasion. 22