Fine.
The second slide, then, basically identifies three key developments that have changed our attitudes towards offshore compliance. First is the revolution in non-tolerance of non-compliance and the fact that politicians are now very much aware that the days of tax havens are coming to an end. Second, there is a move away from international cooperation between tax authorities towards international coordination, and later I'll come back to that and say a few words about it. The third aspect is that some pressures have come from the financial sector upon our tax systems, not just as part of the banking crisis but also from the way banks use aggressive tax planning techniques.
Those are the issues that are addressed.
If you go to slide 3, which addresses the question of why it is at this point in time that we have this upsurge of interest, you can see some of the factors there. They can be grouped into three categories.
First, there's the process of globalization. Put another way, globalization has become a reality, and it's something we have to learn to live with. It brings a lot of benefits to our citizens and to our corporations.
I think the second factor is the recent scandals. I see, in fact, that you have been discussing the UBS scandal in the United States and the Liechtenstein scandal. I don't know how many of you have visited Liechtenstein; it's a very small place, but that scandal has had a major impact on 41 countries around the world.
The third thing is obviously the financial crisis, which has meant that governments need more money and need to show their citizens that the tax burden is being fairly shared.
When you put these factors together, what we have seen over the last three years is that we are really coming to the end of the era of bank secrecy as a shield for tax evaders. All countries have some form of bank secrecy, but today very few of these countries in fact use their bank secrecy to protect tax evaders. I think that is a very important development. Clearly the G-20, working with the OECD, has led this particular initiative. Quite frankly, without the G-20 support I don't think we would have seen the type of progress that we've had since 2009.
The next slide, slide 5, shows you a graph with the number of tax information exchange agreements and double taxation agreements that meet the OECD standard that have been signed between the different G-20 meetings. We're now up to almost 600. I've worked in this business for 30 years, so I know how long it takes to sign an agreement. It is just remarkable that we have 600 agreements signed since January 2009.
The standards—this is the next slide, slide 6—are very simple. Basically, they boil down to saying that we must cooperate with each other to counter offshore non-compliances. The standard we have, in fact, in our dialogue with tax havens is what we call the exchange of information standard on exchange on request. What that means is that insofar as, say, Canada asks Barbados or asks the United States for information that is foreseeably relevant to the Canadian tax authority so that they can fairly apply their taxes, then the U.S. or Barbados should make a response. Of course, this also implies that the requested country has access to information that is reliable and that is easily accessed by the requested authority.
The other thing that's important is that there are provisions in place in these agreements to protect the confidentiality of taxpayer information. That is something we've always worked on as a key to seeing these agreements move forward.
We are particularly pleased that today the standards have been universally adopted by the United Nations, by the G-20, and by all countries around the world.
Let us go to the next slide, slide 7.
It's one thing to have agreements, but what we want is change on the ground. That's why we have created this global forum on tax transparency. It brings together 96 countries now. What the forum has done is put in place a peer review mechanism to ensure that these agreements are translated into action. It's a pretty rigorous mechanism. We've already managed to do 18 reviews. Of those 18 reviews, there are in fact six countries that basically failed, including Barbados and Panama, just to name two of them.
This is what we've been doing at the bilateral level, but we also recognize that in an age characterized by global taxpayers and global multinationals, you need to move away from the bilateral to the multilateral dimension, so we've been working on developing a multilateral convention for administrative assistance in tax matters. You can see on slide 8, in fact, the stages that we've gone through. I think the important thing about this is that it is the gold standard. This is what every tax lawyer or tax administrator dreams about: a convention that's multilateral, not bilateral, and that provides for assistance in the assessment of tax and in the collection of tax, for all taxes, whatever the tax is: VAT, GST, income taxes, or corporate taxes.
Currently 21 countries, including Canada, have signed this convention. It will be opened up to non-OECD countries in just a few weeks' time, and we look forward to having all the G-20 countries, and perhaps some developing countries, actually join us in this convention. It's a very powerful instrument.
I'll give you an example of how it can be relevant for Canada. Let's say that the revenue agency in Canada decides that you want to audit a multinational enterprise that involves activities in Japan, France, and the United States. This convention provides the legal framework to carry out those joint audits, so it's a very powerful tool.
Let us turn to the next slide, slide 9.
I've talked up until now mainly about tax havens, but there's a lot of other work that the OECD is doing to improve tax compliance. On this slide, you'll see some of those activities, primarily carried out by our forum on tax administration. You have a commissioner who has a very active role in that forum. When these 43 commissioners meet, what they're trying to do is change the environment within which tax systems operate. They influence the environment.
I'll just pick up two of the points that are referred to here. One is the issue of banks and the way banks have a lot of opportunities to engage in aggressive tax planning. Just a few months back we issued a draft code of conduct for banks that sets out the way we as tax authorities think they should behave in terms of their tax compliance. The other point I would pick up on is the last bullet point on corporate governance. We think the time has now come to put good tax compliance onto the corporate governance agenda.
Let me finish with perhaps five concluding comments.
The OECD doesn't tell countries what to do, but let me say that it makes some suggestions that Canada may wish to consider. First, currently you have fewer than half a dozen tax information exchange agreements. For a country the size of Canada, a country with a very open economy, you need to have more. I think you need to invest in extending your agreement network. You need to actually also speed up the process of signing and ratifying these agreements. If they're not ratified, then nothing happens on the ground. I think that should be one of your priorities.
The second thing is that you need to invest in your tax administration so they can actually take advantage of this more open and more transparent environment. Believe me, the yields on that investment are very significant. May I give you some figures?
The United Kingdom is investing £4 million in their revenue service; they expect a yield of £7 billion. The United States estimates that it could collect a minimum of $100 billion from better enforcement. Spain has just upgraded its approach to offshore compliance, and this year has collected €10 billion. In other words, there's money out there that you could collect.
However, this is not just a question of more revenue. It's also a question of showing to Canadian taxpayers—honest taxpayers—that the burden of tax is being fairly shared.
The third thing that I think needs to be done--and this doesn't apply just to Canada, but right through the OECD--is that we need to re-educate auditors. We need to tell them that if they come up against a Swiss case or a Luxembourg case or a Panama case today, and if Canada has an agreement with these countries, they can now ask for information, which is something they could not do in the past. That applies also to the agreement you have with Barbados.
Fourth, I think it's important that Canada, working with the OECD forum on tax administration, needs to put good tax compliance at the centre of the good corporate governance agenda.
The last point I would make is that I do think it's important not to look at this in a box, but to see that the fight against tax evasion has to be matched with the fight against money laundering, corruption, and bribery, because all of these activities thrive in a climate of non-transparency, weak regulations, and poor cooperation.
I'd be very happy to answer any questions.