DESPITE CONNECTIVE ACTION, MARSHALL ISLANDS STILL ON OECD ‘BLACKLIST’

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MAJURO, Marshall Islands (Feb. 23, 2001 – Marshall Islands Journal)---The Marshall Islands is getting recognition from industrialized nations for actions it’s taking to prevent money laundering, but so far it hasn’t been enough to get the RMI removed from global tax haven and money-laundering blacklists.

Moreover, the Marshalls and six other Pacific Islands are facing a July 31 deadline for action or they will be moved from the current so-called "name and shame" list to the "uncooperative tax havens" blacklist and be subject to economic and other penalties from the Organization for Economic Cooperation and Development, a grouping of 29 industrialized nations centered largely in Europe and Asia.

At a meeting in Japan last week, the Marshall Islands together with other Pacific Islands rejected an effort by the OECD to get the islands to approve an agreement proposed by OECD setting out a timetable for implementing changes in domestic tax laws, reporting requirements and other OECD demands.

Instead, the Pacific countries called on the OECD to postpone the July 31 deadline to allow time for negotiations with islands in the region.

Noel Levi, secretary general of the Pacific Islands Forum, said they weren’t asking OECD to set lower standards for non-OECD countries in the Pacific, just to give them the same level of dialogue as the OECD has provided to tax haven countries who are OECD members.

Island leaders complain that OECD’s move against Pacific Islands operating offshore banks or corporate services was done without any consultation with the islands.

The OECD has warned that blacklisted countries that do not comply with OECD’s "harmful tax competition initiative" by the July 31 deadline will face sanctions from the OECD.

An Agence France-Presse article on Sunday reported that finance ministers from the "Group of Seven" (major industrialized nations) "welcomed improvements" made by the Marshall Islands and six other blacklisted nations. But despite the RMI’s passage of revised tax legislation that addresses OECD concerns, creation of a financial intelligence unit and the fact that it doesn’t have an offshore banking industry, it hasn’t been taken off the money-laundering blacklist.

"The blacklist is like one of those catalog mailing lists," quipped one Marshall Islands official. "Once you get on it you can’t get off."

The Marshall Islands Journal, Box 14, Majuro, Marshall Islands 96960 E-mail: journal@ntamar.com  Subscriptions (weekly): 1 year US $87.00; international $213.00 (air mail).

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