OECD - Organization for Economic Co-operation and Development

The OECD, based in Paris, was founded back in 1961 in order to promote economic growth and progress through free trade agreements and the free movement of capital. OECD established a Committee on Fiscal Affairs 1971. OECD has 30 member countries, of which all are known as "high-tax" countries. OECD in its turn cooperates with countries all over the world. The purpose of OECD may be good and noble in the broad perspective and the organization has achieved many important milestones.

Among the topics on OECD's agenda are:

• Money Laundering (through FATF)
• Exchange of Information
• Harmful Tax Practices
• Tax Evasion
• Tax Treaties

Looking at the Committee on Fiscal Affairs specifically, it too has achieved a number of good results, such as stimulating the establishment and implementation of double-taxation agreements between nations.

In 1998 the Committee on Fiscal Affairs initiated and implemented a never before seen crusade against what in their opinion is established tax havens. In order to fight non-compliance with the tax laws, it set as its main goal to convince the whole world that so called "harmful tax practices" had to be abandoned, and that three goals had to be achieved:

• International alignment of personal and corporate taxes
• Global exchange of tax information
• Full transparency of taxable income and individuals liable to taxation

The first objective was dropped after the realization that dictating tax policies in sovereign countries would not be possible. The other two objectives are still actively carried forward, and have since its implementation changed the map of offshore financial centres permanently.

Banks and financial institutions around the world, including those domiciled in what is known as tax havens all over the world are under constant pressure by the OECD to exchange information on all tax related matters. Most of these nations have been forced by the OECD to sign commitment agreements covering transparency which includes accessibility for OECD to the name and identity of real company and/or account holders

FATF - Financial Action Task Force

The FATF, based in Paris, was founded in 1989, and is OECD's organization responsible for the coordination of the global efforts to combat money laundering and terrorist financing.

It operates under the assumption that its goals can only be achieved if:

1. Financial surveillance can be effectively implemented world wide
2. The cancellation and end of bank secrecy worldwide.

The organization has issued "The Forty Recommendations" in which a strict framework is laid out on how banking and due diligence procedures should be structured in order to facilitate financial surveillance. The FATF urges all countries to incorporate The Forty Recommendations into their national legal systems. Nations unwilling to accept and implement their recomendations are put on a special blacklist called "Non-Cooperative Countries & Territories" (NCCTs) and threatened with harsh economic sanctions.

In short the recommendations instruct bankers to (using free interpretation):

• Always suspect that your client is a potential money launderer.
• Investigate and report, even if in there is no doubt.
• Never to tell the client that they have filed such a report.
• Established a practice that even if you get it wrong and report an innocent person, nothing will happen to you.

Also worth to note is that the revised version (2003) of The Forty Recommendations clearly states that suspicious transactions should be reported if they are thought to involve tax evasion or tax avoidance.

FATF's campaign on financial surveillance is debated and often questioned amongst criminologists and banking associations worldwide. The bank's costs for their due diligence process has increased big timed. So have the commissions charged by professional money launderers who keep on operating even thou in new and different ways. At the same time all law-abiding citizens are paying a hefty price in terms of increased surveillance, and the loss of the ancient right to financial privacy.

EU - European Union

EU is working very hard in order to structure its internal markets.

Of main interest for Tax Optimization purposes are:

• Savings Tax Directive (2003/48/EC
• Money Laundering Directive (2001/97/EC)

Savings Tax Directive ("STD"; effective since July 1, 2005)

• All EU countries shall automatically exchange information on balances and/or interest on personal bank accounts; the goal is that balances and earned interest shall show up automatically on the tax return form in the EU country where the individual is domiciled and thereby liable for taxation. Established banking nations such as Luxembourg, Austria and Belgium (inside the EU), and Liechtenstein and Switzerland (outside the EU) must now implement withholding tax on interest earned on personal accounts instead of complying with the general automatic exchange of information between EU countries; the tax levels are 15% the year 1 -3, 20% year 4-6 and 35% thereafter.
• Established banking nations such as Luxembourg, Austria and Belgium (inside the EU), and Liechtenstein and Switzerland (outside the EU) must now implement withholding tax on interest earned on personal accounts instead of complying with the general automatic exchange of information between EU countries; the tax levels are 15% the year 1 -3, 20% year 4-6 and 35% thereafter.

Money Laundering Directive

• In 2001, the 2nd Money Laundering Directive was approved, stating that auditors, external accountants, tax advisors, real- estate agents, commissioners of oath and other independent legal professionals such as dealers in high-value goods and casinos must report every activity they may suspect to be connected with "criminal activity". Criminal activity was defined in a way that probably, but not clearly, includes tax evasion.