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Towards a Level Playing Field,
second edition.

Report undertaken by Stikeman Elliott on behalf of the ITIO and STEP.


07 March 2002

Cook Islands commitment to OECD tax project depends on equivalance

The Cook Islands has made a conditional commitment to the harmful tax competition project of the Organisation for Economic Cooperation and Development (OECD). Their media statement, which was first issued on 26 February 2002, is attached. Details of the proposed commitment are still under discussion between the Cook Islands and the OECD.

As set out in the statement, the commitment relies on certain conditions being met, among these, "Equivalent commitments are to be made by all OECD member states", and "Implementation by all OECD Member States and all other relevant jurisdictions of equivalent commitments within the same time frame."

Commenting, ITIO spokesperson Ben Coleman said, "It will be interesting to see whether the OECD accepts these reasonable conditions or whether it still demands that small states have to make changes more quickly than the OECD's own offshore centres of Switzerland and Luxembourg, which will have the effect of advancing OECD members' own interests at the expense of small countries."

"It is manifestly unfair to force small states to do anything before Switzerland and Luxembourg. All countries should move together, taking the same steps at the same time."


1. The International Tax and Investment Organisation (ITIO) is a grouping of small and developing economies (SDEs) set up in March 2001 to help SDEs respond to global tax and investment challenges. It explicitly considers the development implications of these challenges.
2. The ITIO currently comprises Anguilla, Antigua and Barbuda, Bahamas, Barbados, Belize, British Virgin Islands, Cayman Islands, Cook Islands, Malaysia, St Kitts & Nevis, St Lucia, Turks & Caicos and Vanuatu. The Commonwealth Secretariat, Pacific Islands Forum Secretariat and CARICOM Secretariat have observer status.

3. The four OECD member countries who have refused to sign up to the OECD's project (Switzerland, Luxembourg, Belgium and Portugal) include the principal onshore competitors for the offshore world, and account for many of the tax neutral structures run onshore within the OECD. Offshore centres are concerned that if they are not obliged to adhere to the same standards as offshore centres, business will just migrate to these OECD members, which raises further doubts about the fairness of the process.

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