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Towards a Level Playing Field,
second edition.

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


10 October 2003


The Organisation for Economic Cooperation and Development’s tax project is under threat from the European Union’s savings tax directive, which has undermined the principle and timetable for tax information exchange.

The OECD has pressed finance centres across the world, including members of the International Trade and Investment Organisation (ITIO), to move towards tax information exchange by 31 December 2005, and has assured them that any changes would be made on the basis of a level playing field.

However, by permitting some of its own members (who are also OECD members) to avoid tax information exchange until 2010 at the earliest, the EU has thrown matters into confusion.

Next Tuesday 14 October, ITIO member countries will meet the OECD at a “Global Forum” in Ottawa to seek a way through the impasse.

With the savings tax directive, EU countries have abandoned the level playing field proposed by the OECD by excusing fellow OECD members Switzerland, Austria, Luxembourg and Belgium from compliance with the OECD’s exchange of information standards and timelines and by permitting Switzerland to set its own timetable for moving forward.

Further progress will be difficult because the EU has accepted that a unanimous vote of all 15 EU members and the agreement of Switzerland and four other countries will be required before information exchange based on the OECD standard is introduced.

Glenroy Forbes, chairman of the ITIO, said: “ITIO member countries have acted in good faith. The OECD has praised our cooperation but is sadly unable to deliver its own key members.

“EU countries have now been given an alternative to the OECD’s information exchange approach. The Global Forum will need to consider whether to take the OECD’s road or the EU’s or an alternative approach. For the ITIO, any way forward must be on a level playing field.

Richard Hay, co-chairman of the Society of Trust and Estate Practitioner’s international committee, commented: “The EU has undermined the OECD’s harmful tax project. International finance centres have confirmed their willingness to support the principles of transparency and exchange of tax information on a level playing field basis. But EU finance ministers have handed Switzerland an effective veto on further OECD progress.

“Will the OECD’s European Union members and Switzerland meet the OECD’s information exchange standard?

Earlier this year, Donald Johnston, the OECD’s secretary-general, warned privately in a letter to EU finance ministers that by exempting some countries from the exchange of information on tax matters, the EU would damage the OECD’s worldwide drive against harmful tax practices.

The importance of the level playing field is highlighted in the second edition of a major report issued today by the International Trade and Investment Organisation (ITIO) and Society of Trust and Estate Practitioners (STEP).

Towards A Level Playing Field, a study conducted by law firm Stikeman Elliott for the ITIO and STEP, reveals that offshore finance centres regulate to a higher standard than OECD members in key areas, and argues for international acceptance of a level playing field.


1. The OECD Global Tax Forum, a meeting of the OECD and other finance centres, including ITIO members, takes place on 14-15 October in Ottawa, Canada.

2. The EU’s timetable for exchange of information is at odds with the OECD’s. The OECD wants non-OECD finance centres to meet a deadline of 31 December 2005. However the EU savings tax directive agreed in June 2003 permits all EU members to delay exchanging information until Switzerland and four others agree to do so. No deadline is given.

3. The international finance centres invited to the Global Tax Forum are those who have committed to the OECD’s principles of transparency and exchange of information (on a level playing field basis).

4. The level playing field principles are: universal participation in setting new rules; same implementation timetable; and same sanctions for non-co-operation.

5. STEP and the ITIO commissioned Stikeman Elliott to produce the report.

6. The International Trade and Investment Organisation (ITIO) works for a level playing field in the trade in services. It comprises 17 small and developing economies: Anguilla, Antigua & Barbuda, Bahamas, Barbados, Belize, British Virgin Islands, Cayman Islands, Cook Islands, Isle of Man, Labuan (Malaysia), Panama, St Kitts & Nevis, Samoa, St Lucia, St Vincent & the Grenadines, Turks & Caicos and Vanuatu. The Commonwealth Secretariat, CARICOM, Pacific Islands Forum, Caribbean Development Bank and Eastern Caribbean Central Bank have Observer status. See

7. The Society of Trust and Estate Practitioners (STEP) is the professional body for the trust and estate profession worldwide. STEP members come from the legal, accountancy, corporate trust, banking, insurance and related professions, and are involved at all levels in planning, creating, managing and accounting for trusts and estates, executorship, administration and related taxes. STEP has over 10,000 members in leading finance centres in OECD and non-OECD countries alike.

8. Stikeman Elliott is a Canadian law firm with offices in North America, Asia, Australia and Europe. It has a broad corporate and commercial law practice, including private sector and government consultancy on international taxation, banking and securities regulation.

9. For more information, please contact:

ITIO: Ben Coleman +44 (0) 7958 616 444.

STEP: Richard Hay +44 (0) 20 7367 0150 or
Keith Johnston + 44 (0) 20 7763 7156.

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