by Andres Oppenheimer
The world's biggest nations took a potentially historic step - they launched a system to detect secret offshore bank accounts.
The G-20 group of nations, the club of the world's largest economies, announced an agreement to start an "automatic exchange" of information on bank accounts of people who may be evading taxes or trying to hide dirty money abroad.
At the same time, the G-20 agreed to put new pressure on tax havens to lift their bank secrecy laws. The G-20 cited 14 nations, including
Some money laundering experts say that the G-20 agreement could also help prevent government corruption scandals, such as the recent reports that
"There are a lot of corrupt politicians around the world who are nervous about the discovery of their hidden accounts, and they have reason to be concerned," says
According to Intriago, the G-20 agreement has a good chance of succeeding because
That means they will likely go after their tax evaders with unprecedented zeal, he says.
The G-20 deal, prompted by an ongoing campaign against tax havens by the
The European agreement, in turn, follows the steps of a 2010 U.S. law - the Foreign Accounts Tax Compliance Act (FATCA) - that requires foreign banks to report accounts of U.S. residents starting on
U.S. officials say that, for the time being,
According to the Tax Justice Network, a British-based non-government group, there is more than
In some cases, such as
Asked about the G-20 agreement,
Other bankers caution that, while the G-20 moves may help trace the funds of tax evaders and corrupt politicians, the proposed global cooperation could hurt legitimate business people who deposit their savings abroad to protect themselves against repressive governments or economic instability.
It's hard to blame Argentines for putting their money in offshore accounts, when their bank deposits were seized by the government in 2001. And it's hard to blame Venezuelans for sending their money abroad when the government is selectively punishing the opposition and confiscating companies at its whim, they say.
My opinion: The G-20 agreement is a step forward, but it's mostly a statement of good intentions. I read some parts of it, and it has more holes than a Swiss cheese (no pun intended).
It says the G-20 countries will urge countries to automatically exchange tax information with their treaty partners "as appropriate" and "taking into account country-specific characteristics." That leaves a lot of room for maneuvering.
Still, the G-20 move starts a new process that will eventually make it harder for people to hide money offshore. It's an issue that is not making headlines, but should.
It deserves a much greater public discussion, both to ensure the protection of legitimate depositors who live in unstable countries and to advance the fight against tax evaders and corrupt politicians who hide their money abroad.