OECD wants Global Forum to control international tax evasion

The OECD has plans to assign more authority and power to the Global Forum on tax-information sharing, a loose grouping of 84 nations, so as to turn it into a formal international institution with a permanent staff of examiners. According to the OECD’s plan the forum would review whether members are aiding one another in cases involving tax evasion internationally. In particular, the forum would examine whether members are living up to their obligations under tax-exchange agreements, and make suggestions on how to improve.

Checking a country’s compliance to its tax information sharing agreements examiners appointed to the forum will issue reports that will be discussed with other forum members. The main idea is to make reluctant countries to be more transparent. The move is lobbied by the United States but it remains unclear whether it would find support among other countries.

OECD wants the forum to have a power to continue its investigation even if a country refuses to be fully transparent.

"For the Global Forum to maintain a strong leadership role," the OECD draft said, "it is critical that jurisdictions which refuse to make progress toward full transparency and effective exchange of information would not be in a position to block the work." The OECD report suggests that such countries could be thrown out of the Global Forum. That could be a strong deterrent if the U.S. and countries in Europe reduce legal ties with such outliers.