6 Jurisdictions Pledge to End Tax-Haven Status

Six locations popular as tax havens with Americans and Europeans have promised to end within five years the practices that gave them that reputation. The commitments from Bermuda, the Cayman Islands, Cyprus, Malta, Mauritius and San Marino--an enclave within Italy--came in letters to the Organization for Economic Cooperation and Development, a Paris-based body of developed countries that next week is expected to release a list of jurisdictions identified as places that offer laws “to be used by nonresidents to escape taxation” in their home countries. This list could eventually be used as the basis for international sanctions or other punitive action against identified tax havens and private companies operating there. Each of the six letters pledges that by the end of 2005 harmful tax practices will be eliminated, that international standards for fair tax competition, transparency and disclosure will be adopted and that no new harmful tax regime will be imposed.