Switzerland put on OECD 'grey list', plans to hit back

13 April 2009

Switzerland is livid after it was put on tax haven 'grey list' by the ­Organisation for Economic Co-operation and Development (OECD) at the G20 summit and is contemplating measures to hit back by delaying payment of its membership fee.

Leaders at the G20 meeting had threatened to be decisive against "noncompliant" jurisdictions that refuse to respect OECD, a 30-member organisation of major industrialised countries, especially against tax haven countries. (See: G-20 cracks whip on tax havens; OECD publishes blacklist)

The leaders of the most powerful 20 nations in the world, which together represent roughly two thirds of the global population and 90 per cent of the world's gross domestic product, agreed to fix the loopholes that currently exist around hedge funds and tax havens and impose sanctions on those countries that evade giving information on tax evaders.

The OECD had listed 38 territories as those that ''have committed to the internationally agreed tax standard but have not yet substantially implemented'' the measures and the countries were Belgium, Brunei, Chile, the Dutch Antilles, Gibraltar, Liechtenstein, Luxembourg, Monaco, Singapore, Switzerland and Caribbean island nations including the Bahamas, Bermuda and the Cayman Islands.

Costa Rica, Malaysia, Philippines and Uruguay made commitments to the internationally agreed tax standard on exchange of information as required by the OECD subsequently.

Swiss politicians were enraged to find their country on the OECD's "grey list" after it had announced measures to relax its tax secrecy laws and Switzerland is now considering blocking the progress in cooperation with China, India and other emerging countries, according to Swiss officials, as reported in The Neue Zuercher Zeitung (NZZ).

Switzerland on its part, started blocking payment of €136,000 ($180,000) to the OECD.