LONDON, March 13: Ahead of G20 finance ministers’ conference this weekend, France and Germany have proposed a fresh crackdown on tax havens and offshore financial centres, insisting that banks that use them be forced to put aside higher capital to offset the risk to the financial system.

One estimate has put the annual loss to the UK Exchequer at around £100bn due to tax evasion and tax avoidance while the developing countries are said to lose as much as £250bn ann- ually due to tax dodging and transfer pricing.

Christine Lagarde, French Finance Minister, and Peer Steinbrück, her German counterpart, said they wanted leaders attending the G20 summit on April 2 to sign up to the idea that banks and insurers should be forced to disclose their use of tax and regulatory havens in their annual regulatory filings.

The Organisation for Economic Cooperation and Development is drawing up a fresh list of non-cooperative tax havens. The existing list includes only Monaco, Andorra and Liechtenstein.

Monaco, which, like Liechtenstein and Andorra, was put on an OECD list of “un-cooperative tax havens” in 2000, said it was reviewing its position, but did not expect to reach a conclusion for several weeks. Andorra indicated it would move to repeal bank secrecy rules.

Singapore said it would relax its bank secrecy rules, which are among the strictest in the world.

Hong Kong announced plans to allow the exchange of tax information last month.
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