and money laundering by high net worth individuals (“Swiss/Liechtenstein leaks”, “Mossack Fonseca Papers”).

International concern about potential weaknesses in the way international standards developed in the early part of the last century interact with modern ways of doing business is not new.<sup>4</sup> Similarly, governments in many countries had long-standing concerns about banking secrecy and the use of offshore financial centers for tax evasion. But the financial crisis gave these concerns new prominence and new urgency.

The first sign of a renewed determination to tackle cross-border evasion and avoidance came in April 2009, when the G20 meeting in London declared that the “era of banking secrecy is over”.<sup>5</sup> This led to several countries withdrawing their reservations to the exchange of information on request article contained in model double taxation agreements. The Global Forum on Transparency and Exchange of Information (the Global Forum) was restructured to strengthen implementation of the international standard on exchange of information, through a process of peer review. Subsequently, the standard itself was enhanced to encompass automatic exchange of information about financial accounts.<sup>6,7</sup> That new standard was codified as the “Common reporting Standard” (CRS) and supported by a Model Competent Authority Agreement.<sup>8</sup> The introduction of the CRS is a major development.<sup>9</sup> It is notable that the CRS requires information to be exchanged that includes details of the beneficial owners of entities, including trusts, that might otherwise be used to disguise the true ownership of financial accounts.<sup>10</sup> This is enhancing the ability of governments in both developed and developing countries to detect funds that have been lodged in undisclosed offshore accounts for the purposes of tax evasion and other criminal reasons.<sup>11</sup> Some behavioral changes in individuals’ use of offshore jurisdictions can already be observed. De Simone et al. (2018), for instance, assess the effects of the Foreign Account Tax Compliance Act (FATCA), which increased reporting

> 4 For example, the OECD started consultations with businesses about the transfer pricing implications of business restructuring in 2005: http://www.oecd.org/tax/transfer-pricing/45690216.pdf, page 4. 5 The leaders’ declaration can be accessed here: https://www.g20.org/en/g20/timeline.

6 This development was modeled on legislation in the United States that was enacted in response to the revelations of tax evasion by US citizens involving secrecy jurisdictions. The Foreign Accounts Tax Compliance Act (FATCA) was signed into law in 2010 and came into effect in 2014. Alongside the legislation, the United States entered into agreements with other governments, based on two alternative models, which enabled the reporting process to take place by way of exchange of information between governments. See: https://www.irs.gov/businesses/corporations/fatca-governments.

7 G20 Finance Ministers and Central Bank Governors endorsed automatic exchange of information as part of an expected new standard in April 2013. http://en.g20russia.ru/events_financial_track/20130418/780961081.html.

8 http://www.oecd.org/ctp/exchange-of-tax-information/standard-for-automatic-exchange-of-financial-accountinformation-for-tax-matters-9789264216525-en.htm.

9 Automatic exchanges of information have already taken place between 45 jurisdictions.

http://www.oecd.org/tax/OECD-Secretary-General-tax-report-G20-Finance-Ministers-Argentina-March2018.pdf.

10 The standard uses the term “controlling persons” but this is explicitly linked to the concept of beneficial ownership, as described in Recommendation 10 of the Financial Action Task Force Recommendations: http://www.fatf-gafi.org/publications/fatfrecommendations/documents/fatf-recommendations.html.

> 11 The Global Forum now has 154 members who are committed to the international standard on exchange of information. In 2018, <mark>4,500 successful bilateral exchanges took place between 86 jurisdictions under the new AEOI Standard. There is an ongoing program of technical assistance to help all members to meet the AEOI standard. For more information see: http://www.oecd.org/tax/transparency/AEOI-Implementation-Report2018.pdf.</mark>

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