Finance committee  You're correct, and the government should not only sign the agreements, but get them ratified as well.

Finance committee  In the case of the Canadian agreements you are too early, because even though many of them are signed, they are not yet ratified. If I look at other countries, I can see that the agreements that have been signed and ratified are already having an impact. There's the Irish example I quoted.

Finance committee  Yes, I have a quick comment. Technology has clearly benefited both the tax evader and the tax administrator. On balance, the advantage of the tax evader probably exceeds the advantage of new technology for tax administrations. Today, with the click of a mouse, you can move billions of dollars around the world.

Finance committee  In a sense it's an issue of reputation, because all this information is published. You can actually read why Barbados or Panama has not moved on to phase 2. That does not go down very well in the financial community, so there's a reputation price to doing that. They also can't get the final rating, because we won't give a final rating to a country on whether they are compliant or non-compliant until they have completed both phase 1 and phase 2, so it's a pretty important public statement that comes out.

Finance committee  I don't think it's an either-or situation. I think you need to back up with better compliance and better audit, and with disclosure regimes that encourage people to come forward. I personally don't like amnesties. Voluntary disclosure regimes are not amnesties because you pay your tax and you pay your interest.

Finance committee  As I said, this is not just a question of raising more revenue, although that obviously is important. It's also a big issue that honest taxpayers know that the tax burden is fairly shared, and it's also a question of making sure that legitimate companies are not put at a competitive disadvantage by illegitimate companies that are prepared to use tax havens to gain a competitive advantage.

Finance committee  Well, in fact, in the two standards that we have, one standard is on transparency, so you can't have bank secrecy and you can't have bearer shares. You have to be able to get behind beneficial ownership arrangements. In other words, you need to have a transparent system in place, and then you have to be able to exchange this information with your trading partners, which requires that you have some agreements.

Finance committee  Yes, I actually skipped over that. It's a pretty complex area. It basically involves how you go about taxing income from collective investment vehicles. The challenge for governments is how you find a balance. On the one side you want to make sure that tax does not act as a barrier to the effective operations of capital markets, particularly the national capital markets, but on the other side you want to make sure that the people who use these markets are in fact paying their fair share of taxes.

Finance committee  Yes. The process has been set up collectively by the 96 countries that are within the forum. The reviews are always done by two assessors, two countries, and a member of the OECD secretariat. It's very impartial. The rules are the same whether you're a large country or a small country, an offshore centre or an onshore centre.

Finance committee  My answer would be yes.

Finance committee  Perhaps I could come in there, because I talked a lot about the exchange of information work that we do. In fact we do much more work on improving compliance more generally. We look at how countries can do joint audits, how they can put in good risk management systems, how they can deal with the problem--

Finance committee  The simple answer is that there is not a place for tax havens as tax havens; there is a place for them in offering neutral environments in which multinationals can operate. In other words, if a multinational is using a tax haven to evade or avoid taxes that are legally due, that's unacceptable.

Finance committee  Sometimes what you're talking about is having a regulatory and financial environment that facilitates transactions that you could not do onshore. Take captive insurance companies as an example. Why do captive insurance companies go offshore from the United States? It's because they couldn't do their business onshore.

Finance committee  We don't have any statistics, but I think once you bring money that's been outside of the tax system into the tax net, it's very hard for that money to escape again. You would know how much a Canadian resident would own in terms of capital in a place like Switzerland, so it would be very hard for him to come around in year two and say, “Sorry, I don't have that.”

Finance committee  Yes, we have. When you move from the bilateral to the multilateral, it's always more difficult, but at the end of the day, if we want to confront global taxpayers, whether individuals or large multinational corporations, the ideal way of doing it is by multilateral conventions, so we're supplementing these bilateral agreements with multilateral conventions.