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Anne Lindner
 

Vanuatu May Comply with OECD Soon

26 April 2002

In response to the Organization for Economic Co-Operation and Development's recent publication of its updated blacklist, a government official in Vanuatu said the country may commit to the OECD sometime this year.

According to a representative of Rowan Downing, the advisor to Vanuatu's attorney general, Vanuatu has not signed a memorandum of understanding with the OECD. It may, however, consider signing the MOU when First World counties both sign and comply with it first.

"They will agree to sign and implement law and support its directions when other counties also sign and implement complying law and policies," said the representative, who wanted to remain anonymous.

According to the state law office source, the MOU could be signed in the "near to mid term."

Last week, the OECD released its newest list of countries it deems to be uncooperative tax havens. Andorra, Liechtenstein, Liberia, Monaco, the Marshall Islands, Nauru and Vanuatu make up the list.

Since the OECD embarked on its mission to put an end to harmful tax practices in 1998, it has received commitments to improve transparency and ease of information exchange from 31 jurisdictions.

Some I-gaming jurisdictions, however, have already signed up to comply with the OECD. Those nations include the Isle of Man, Malta and the Netherlands Antilles.

The nature of Vanuatu's economy prevents it from signing the MOU, the government representative said. The document on fair taxation practices requires that a nation have a balanced economy that is resilient enough to withstand onshore and offshore competition and that taxes fund the government. As per the MOU, each country must provide the others with access to their markets.

With the exception of Vanuatu's two major towns, Port Vila on Efate and Luganville on Espirito Santo, the country's economy is based on communalism, meaning that the villagers share everything and have no need for cash.

In addition, almost everything on the island short of kava, beef, seafood, vegetables and ice cream, which are all produced in the country, must be imported. If Vanuatu, which is home to the CrownGames online casino, signs the MOU, the representative said, it would have to remove import duties and institute business and personal income tax.

"Doing so would place an unfair burden on Port Vila and Loganville businesses and people--relative to the rest of the population," he said. "The real danger is that doing so may force these businesses and business people offshore."

The representative pointed out that the Financial Action Task Force considers Vanuatu cooperative regarding the prevention of money laundering prevention, identification and reporting.

Vanuatu May Comply with OECD Soon is republished from iGamingNews.com.
Anne Lindner
Anne Lindner