OECD and Offshore Financial Centers

Abstract

The article raises the controversial issues of using the features of offshore financial centers. The authors have made an attempt to highlight last initiatives of international organizations, particularly Organization for Economic Cooperation and Development, in regulation the activity of such offshore financial centers (tax havens). The Organization for Economic Cooperation and Development issued in 1998 report “Harmful tax competition: An emerging global issue” which defined key factors that constitute harmful tax competition. To address the problems caused by harmful tax competition OECD proposed to develop a list of tax haven which do not comply with international standards; to develop recommendations addressed both for members-states of OECD and nonmembers states and territories. This article demonstrates the progress made by tax havens in changing its legislation in order to comply with international standards and different opinions about legal grounds of such initiative of OECD under international law. Authors expressed opinion that complex of norms of international law, which regulates activity of offshore financial centers, is developing.