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The OECD's progress report on adherence to global standards on the exchange of tax information has an effect already since it was published yesterday.
Uruguay, one of the four jurisdictions listed as having not complied with international standards of tax information exchange, has since written to the OECD to say that it endorses the standards on transparency and information exchange, as set out in the Organisation's model tax convention.

The OECD published the progress report yesterday evening after the end of the London summit of G20 leaders. The meeting of the world's biggest economies warned that action will be taken against those that did not comply with international tax rules.

"We agree to take action against non-cooperative jurisdictions, including tax havens," the leaders said. "We stand ready to deploy sanctions to protect our public finances and financial systems. The era of banking secrecy is over."

As well as Uruguay, the report highlighted Costa Rica, Malaysia and the Philippines as jurisdictions that have not complied with the OECD's standard for tax cooperation.

A spokesperson for the Philippines' government said: "It is unfortunate that the Philippines has not been able to meet the timetable for review and implementation of these revised tax information standards. But we are committed and confident to meet the requirements for us to be removed from the list of non-complying countries."

The report also included a separate 'grey list' of countries that have agreed to improve transparency standards, but who have failed to implement any measures substantially. The list includes Belgium, the Cayman Islands and Switzerland.

Switzerland's President, Hans-Rudolf Merz, said: "Switzerland is not a tax haven. It always meets its obligations and is always ready to engage in dialogue. The fact that Switzerland as a founding member of the OECD was never included in the discussions on drawing up lists is particularly strange."

After the G20 meeting, Angel Gurria, the OECD's Secretary General, said: "Recent developments reinforce the status of the OECD standard as the international benchmark and represent significant steps towards a level playing field. We now have an ambitious agenda, that the OECD is well placed to deliver on. I am confident that we can turn these new commitments into concrete actions to strengthen the integrity and transparency of the financial system."

The grey list includes jurisdictions that agreed to the OECD standard a number of years ago but who have yet to sign any agreements that would allow for the exchange of tax information.

However, opinions are split as to whether tax information exchange agreements (TIEA) are an effective method for creating greater tax transparency.

"TIEAs are the way forward. The devil will be in the detail and it is important to look at the small print in these agreements," said Andrew Watt, managing director of tax disputes and investigations at Alvarez & Marsal Taxand UK, a tax advisory firm.

However, David Harvey, chief executive officer of the Society of Trust and Estate Practitioners, was sceptical of this approach: "Exchanging information is only effective when reliable information, relevant to the tax requirements of a requesting jurisdiction can be made available, in a timely manner, and there are legal mechanisms that enable the information to be obtained and exchanged."

The rest of the report outlined the 'white list' of countries that have substantially implemented the international tax standard. The list includes the UK, US and China. However, the list also contained a number of UK Crown Dependencies including Jersey, Guernsey and the Isle of Man. These islands have been subject to much criticism over the past months for their low-tax regimes and the perception that they do not supply tax information readily.

"Inclusion on the white list represents a major endorsement of the Isle of Man and of our long-term strategy of positive engagement with the OECD," said Isle of Man's Treasury Minister Allan Bell. "This can only reinforce the Island's reputation and confidence in our future as an international business centre of quality."

The G-20 is reported to have fixed on a target of 12 TIEAs that jurisdictions must sign if they want to be removed from the tax haven list.

Commenting on this news, Richard Murphy of the Tax Justice Network wrote on his blog: "As Jersey and the Isle of Man have proven there's an easy way to do this – you sign TIEAs with almost meaningless locations like the Faroe Islands and Greenland where there is no chance that an information request will ever arise. If that's the case, the criteria set by the OECD have created just about the biggest tax avoidance scheme ever known."

The G-20 asked the OECD to report back to them in November about the adherence to and implementation of international standards. They have threatened to impose sanctions on jurisdictions that fail to comply. These penalties could include the threat to withhold tax payments to the jurisdictions and the possibility of increased disclosure requirements for companies invested in uncooperative tax havens.

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