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10 February 2003 Following concern expressed by a number of offshore jurisdictions that the EU's Savings Tax Directive deal agreed two weeks ago makes a 'level playing field' unachievable, Panama has now written to the OECD putting on hold any further actions to fulfil the 'commitment letter' it signed last year. Here is the text of the letter: |
Republic of Panama
Ministry of Economy and Finance
Office of the Minister
Panama, 28th January 2003
Note No.101-097 DMEyF
Mr. Donald Johnston
Secretary General of the Organization for Economic
Cooperation and Development
2 Rue André Pascal
75775 Paris, Cedex 16
France
Dear Mr. Secretary General :
The Government of the Republic of Panama writes to you once again to address the matter of the European Union's directive regarding savings that was approved by the Council of Ministers of Economy and Finance of the fifteen member nations last week.
You will remember that last December our Vice Minister of Economy, Mr. Domingo Latorraca, had advised you of the Government of Panama's deep concern in light of the preferential conditions that such exchange of tax information directive would grant to Austria, Belgium and Luxembourg, as well as to Switzerland (which does not form part of the EU), all these being members of the OECD.
Upon confirming that the proposal made by the above EU president has been basically adopted such that the above-mentioned countries will not exchange tax information on savings accounts with other EU members - nor with OECD members - until 2010, the Government of Panama reiterates its rejection of such action, as it directly violates the principle of equality envisaged in the often discussed concept of a "level playing field" that is the essential basis for the undertaking signed by my government, in good faith, to participate in the studies of the OECD's effective tax information exchange project at its Global Forum.
This situation is even more untenable upon confirmation that one of the arguments put forth to justify the granting of a "special" treatment to these three EU members by their community partners is the defense of their economic interests as providers of international financial services.
My Government has learned that the government of Antigua and Barbuda and that of Saint Vincent and the Grenadines have asked the Secretariat General of the OECD to call, as a matter of urgency, a meeting of the Global Forum in order to assess the future of the studies on the matter of tax information in light of the serious damage that a measure such as that adopted by the EU implies for this multilateral effort, as well as the damage that would be done to all the participants who have in good faith signed undertakings regarding this matter and whose economic interests as providers of international financial services are equally important, particularly since they are for the most part developing countries.
The Government of Panama supports the proposal made by Antigua and Barbuda, since technical studies such as those of the Ad Hoc Group on Accounts are being made on premises that have presumably been established on a political level, such as absolute compliance with the principle of equality or of a "level playing field". These studies cannot be continued inasmuch as there is not absolute certainty that the conditions shall be equal for all participating jurisdictions.
Consequently, the Government of Panama joins in the statement made by the Government of Antigua and Barbuda and evidences its view, in light of the change in the conditions set down for carrying out the studies of the Global Forum, that it does not deem it appropriate to respond to any document sent by the OECD until such time as a meeting of all OECD countries and all non-OECD jurisdictions that participate in the Global Forum shall be held in order to assess and decide, together, whether there are sufficient grounds and guarantees from all the OECD countries so as to allow the studies on the effective exchange of tax information project to continue.
We look forward to your reply on this matter and remain
Yours sincerely,
(sgd.) Norberto Delgado D.
Minister of Economy and Finance
