European Organization Keeps C.R. on Blacklist

February 19, 2010

Costa Rica remains on an international blacklist for tax havens, despite efforts in recent months to comply with information-sharing standards.

Costa Rica was singled out in April 2009 for a delay in releasing to requesting countries information about suspected tax evaders. While Costa Rican officials have agreed to take measures to meet international standards, the Legislative Assembly has yet to make the appropriate reforms.

“We are continuing to try to comply with the Organization for Economic Cooperation and Development (OECD), but we can’t commit to legislators passing (appropriate legislation.),” said Finance Minister Jenny Phillips in December of last year, after a meeting with OECD officials in Paris, France.

In a press release on Wednesday, Phillips said she hopes the news that Costa Rica is still blacklisted would be a wake-up call for lawmakers.

“To avoid being on this list, it’s not enough to simply voice commitment,” she said. “Developed countries are demanding real change, which is why modifying our legislation is essential. The Legislative Assembly’s eventual appropriation … would take us off this list and allow us to avoid sanctions levied (by France).”

The French government has already indicated that it would impose fines of as much as 50 percent – up from 33 percent – on dividends and interest fees paid by French firms to people or other firms domiciled in tax havens.

Costa Rica is not the only country to find itself on the latest OECD blacklist. Guatemala, Panama and several Caribbean countries, as well as the Philippines and Liberia, also were identified as tax havens. In all, 18 countries appear on the list.

“The issue of exchanging tax information has become critical after the (economic) crisis,” according to a Finance Ministry statement. “The level of tax evasion in developed countries is quite high, and these countries are hungry for resources to get out of their financial problems.”

An estimated 24 percent of the world’s wealth is deposited in tax havens with very low or no taxation, according to the ministry.

Phillips will meet with the Legislative Assembly Feb. 26 in efforts to convince lawmakers to pass information-sharing reforms so that Costa Rica can be dropped from the international blacklist of tax havens.

– Chrissie Long

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