The strange case of Macau, the tax haven that disappeared
If you read the London Summit communique, issued at 1600GMT you will find:
"The era of banking secrecy is over. We note that the OECD has today published a list of countries assessed by the Global Forum against the international standard for exchange of tax information."
But by 2130GMT last night it had not been published. And then at 2131 it was.
This list was long fought for by those who want to close down tax havens, because the intention was to include on it some European countries who, while not exactly in the same league as other Bond-film destinations, such as Grand Cayman, have not completely conformed to OECD norms. Thus Belgium and Austria are on it, as of course is Switzerland, albeit on a "grey part" of the list entitled "other countries".
Now Newsnight is, as always, keen to provide full and timely public service to those who need to stash the proceeds of drug dealing, dictatorship and arms-company lobbying. So we wanted to publish the list. Where was it?
My producer phoned the OECD at 1800.
"Watch the website we can't say anymore than that".
I phoned Downing Street at 2050.
"It's not for us to publish, it's for the OECD" said an apologetic press officer.
"But it means the communique is wrong," I protested. "Talk to the OECD," was the answer.
Thanks to some keen reporting from the Guardian we now know what happened.
On Wednesday night there were frosty negotiations between France and China over the inclusion of Macau, which got mixed up with France deciding to moderate its criticism of the People's Republic of China over the issue of Tibet. I quote:
"[Hu and Sarko] finally agreed to meet at Sarkozy's hotel, the Mandarin, a helpfully named venue. But the Chinese refused to turn up until the Elysée issued a joint diplomatic communique in which France moderated its position on Tibet. The meeting finally went ahead just after 10.30pm. The air cleared - the two men discussed whether Macau should be blacklisted or given more time. But it took an intervention from Barack Obama to help seal the deal on tax havens as the French and the Chinese haggled until the last five minutes of the summit. "Let's get this all in some kind of perspective guys," Obama said at one point."
So the deal on Macau was done in the last five minutes of the conference. But was the OECD in the loop for that last five minutes? From the five hours it took to publish the so called black, white and grey list of tax havens, I am guessing not.
Only at 2120 did it release to Reuters the fate of Macau:
"China is on a third "white list" of jurisdictions that have substantially implemented the internationally agreed tax standards. But the OECD said China's two Special Administrative Regions of Hong Kong and Macao had so far only "committed to implement" the internationally agreed tax standard."
Now take a look at the list itself in this PDF. Can you find the word "Macau"? You can not. What you will see is that China is given the same gold plated reference as the UK, but then there is footnote number two.
Footnote number two simply states: "Excluding the Special Administrative Regions, which have committed to implement the internationally agreed tax standard."
Now even Jacques Derrida would not have needed long to provide a comprehensive deconstruction of this particular text.
Hong Kong and Macau function as major financial centres for the PRC economy as a whole, and for the South East Asian region generally. If you add, as Reuters did, the word "so far only" committed to going legit then surely Macau and Hong Kong should appear somewhere on the grey list (the black list is for reprobates who will not even commit to the international standard: Costa Rica, Phillippines, etc)
How does Austria get named and shamed, while Macau does not even get named? Ask the Dalai Lama.
And what say did the OECD - supposedly an independent arbiter of who's straight and who's crooked - actually have?
Since the "era of banking secrecy is over" I expect we will be soon told.
[UPDATE: I missed this, from the FT, which sheds further light on the last minute deal.
"According to the account, which has since been confirmed by non-US officials, Mr Obama got the two leaders to agree that the G20 would "take note" of the Organisation of Economic Co-operation and Development list of rogue offshore tax havens rather than "endorse" that list. This allowed the Chinese to save face, since they do not belong to the 30-member Paris-based OECD. And it allowed Mr Sarkozy to be able to claim back home that he had chalked up a blow against old-fashioned Anglo-Saxon capitalism."
Taking note of the list rather than endorsing it allowed the Chinese to save face. But tax expert Richard Murphy thinks this will allow the G20 to alter the list in future.]