LONDON – The Philippines was among four nations blacklisted as uncooperative tax havens yesterday after Group of 20 leaders declared the age of banking secrecy was over and said they would no longer tolerate shady havens draining away badly needed tax revenue.

At the request of the G20 summit of rich and developing nations, the Organization for Economic Cooperation and Development (OECD) named the Philippines, Uruguay, Costa Rica and the Malaysian territory of Labuan as the worst offenders, saying they had refused to adopt new rules on financial openness.

Leaders had agreed to name and shame the countries that refuse to exchange tax information, which could result in tough sanctions – including the withdrawal of financing by the World Bank or International Monetary Fund.

“The time of banking secrecy has passed,” French President Nicholas Sarkozy said following the summit. “Everyone around the table wants an end to tax havens. Everyone knows we need sanctions.”

The announcement reflects mounting concern that banking secrecy in tax havens has helped to worsen the economic crisis by disguising the true value of some global assets. Anti-poverty activists say such places provide corrupt officials places to stash illicit funds, often depriving poor nations of needed resources.

The OECD has divided countries into three categories: those who comply with rules on sharing tax information, those who say they will but have yet to act and nations which have not yet agreed to change banking secrecy practices.

Switzerland and Liechtenstein, which both have strong banking secrecy traditions, said last month they would adopt international rules on tax cooperation and were ready to comply with G20 demands.

Liechtenstein, Switzerland’s tiny Alpine neighbor, said it has already met with British officials to prepare for the new standards. Monaco said earlier that it would be more transparent with foreign tax authorities.

In return they were spared the fate of being blacklisted but were left in a gray area of countries that still have to implement their commitment to accept new information-exchange standards.

China supported the blacklisting, but would not agree to have two territories, Hong Kong and Macau, classified as uncooperative tax havens.

Potential sanctions for transgressors include extra audits of those who use tax havens and curbs on tax deductions claimed by businesses using the territories.

In their communiqué, leaders said they may consider further penalties in their bilateral relations with tax haven territories.

German Chancellor Angela Merkel said Brown and President Barack Obama played a key role in pushing for a crackdown on tax havens.

At least 35 offshore tax havens, from Britain’s Channel Islands to the Cayman Islands in the Caribbean, are under increasing pressure to provide more information to international authorities to prevent people from evading taxes or hiding income by shifting money to such places.

Stephen Timms, financial secretary to the British Treasury, said a culture of banking secrecy had worsened global economic problems.

“That lack of transparency – that opaqueness – has contributed to the severity of the problems we are seeing in the world economy at the moment,” he said. – AP - (Philstar News Service, www.philstar.com)

Would the key measures approved in the recent G-20 Summit bail developing countries out of the global financial crisis?

Two key points were agreed on by world leaders in the recently concluded G-20 Summit in London. One related to the funds available to international institutions to help poor or struggling economies to withstand the crisis, and the second on tougher global regulation of financial markets.

The International Monetary Fund is the biggest beneficiary of the first set of measures. Its $250 billion reserves will be tripled to enable it to better help stricken countries in the developing world. The leaders also agreed to provide an additional $250 billion in guarantees for export credits and other trade finance, which have dried up in the past few months and led to a drastic drop in global commerce.

The other key set of decisions concerns financial regulation and corporate behavior in a wider sense. Under the deal, hedge funds and other financial-market players will be subject to far greater - and properly coordinated - international scrutiny, as will big banks with activities in several countries.

What’s in it for the Philippines? Would it make any difference to the rural poor communities?