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July 28, 2014
The Organization for Economic Cooperation and Development (OECD) is moving towards implementing a new tool for catching tax evaders: automatic exchange of financial information (AEOI). While the name might sound a bit confusing, the idea is pretty simple. Governments in the system will share financial information with each other at designated intervals, enabling authorities to find individuals and corporations that are stashing assets in foreign countries.
While it’s a welcome initiative, we have serious concerns about the OECD’s efforts thus far to include developing countries. Developing countries are some of the hardest hit by tax evasion and other types of illicit financial flows, and much of the money that leaves often finds its way into bank accounts in the US or Europe. It’s imperative that a global information exchange is written with all countries in mind.
The infographics below spells out some of our concerns: