MAJURO — The Organization for Economic Cooperation and Development list of seven uncooperative tax haven nations lacks credibility, a Marshall Islands official said Friday in response to the announcement of the list. “The list has very little credibility because the OECD is not making the same demands of its own member nations as it is requiring of us,” Alfred Alfred Jr., the Marshall Islands government’s banking commissioner, said.
The Marshall Islands is one of seven countries–-three are in the Pacific, including Vanuatu and Nauru–-named by the OECD’s as being a tax haven that is uncooperative in the OECD campaign to harmonize taxes globally. OECD is threatening to take sanctions or “defensive measures” against the seven nations within the next 12 months.
The OECD campaign is using a “double standard” and not providing a “level playing field” for all the nations involved, Alfred said.
“If we commit to the OECD initiative, our foreign investors will head to the four OECD member countries that are not following OECD requirements,” Alfred said in reference to the fact that Switzerland, Luxembourg, Belgium and Portugal have not committed to the OECD standards.
The Marshall Islands announced publicly in late February that it would not commit to OECD demands so its appearance on the list was not a surprise. “We anticipated being on the OECD list,” Alfred said.
But the Marshall Islands has also “conveyed to the OECD that we are not happy that OECD has put up a list,” he added.
“There are so many questions about OECD’s tax initiative. The list is unfair and it has no credibility.” The OECD has listed seven countries but has not included its four member nations that are not committing to the OECD tax initiative. The primary target of the OECD campaign in this central Pacific nation is the Trust Co. of the Marshall Islands, a company that is managed by International Registries Inc., a Reston, Virginia firm that until recently also managed the Liberian ship registry.
The Trust Co. “is one of the major revenue earners for the Marshall Islands government,” Alfred said. “Effectively, OECD is telling us to close down the Trust Co., but it’s offering no alternative revenue earning options.”
The Trust Co. injects more than $1 million annually into Marshall Islands government coffers, a figure that Alfred described as “substantial” in a country with an annual national budget in the $90 million to $100 million range.
The Trust Co. was launched in the late 1980s as a ship registry. It recently moved up to ninth largest worldwide in terms of gross tonnage of ships registered. In the mid-1990s, the firm branched out to include a corporate registry. It does not register off-shore banks.
