The list, which was released yesterday, escalates a campaign to pressure the countries to change their systems. Countries on the list, which was prepared by the Organization for Economic Cooperation and Development after consultations with the countries, are being given a year to act, after which they might face sanctions. In the global economy, countries frequently compete for investment in terms of tax rates.
Low taxes make a country more attractive to foreign money.
In their inquiry, OECD officials looked for jurisdictions that offered minimal tax rates, that gave foreigners breaks their own citizens couldn't get, that did not require benefiting companies to do any real business there, and did not cooperate on exchange of tax information with other countries. We will have succeeded if we have a list with no one on it. West said that getting off the list would help countries develop as financial centers. Some of the target countries have worked closely with the OECD to bring their rules into compliance. Others, including Liechtenstein, have objected to the procedure, in which the Paris-based OECD is in essence writing tax rules and insisting the rest of the world adopt them.