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14 January 2010
In 2000 the Organization for Economic Cooperation and Development (OECD) identified a number of jurisdictions as tax havens, which led to Aruba being placed on the OECD's blacklist. Between 2000 and April 2009, a total of 31 jurisdictions created formal standards of transparency and exchange of information. In May 2009 the OECD's Committee on Fiscal Affairs decided to remove the three remaining jurisdictions - Andorra, Nauru and Vanuatu - from the list of uncooperative tax havens in the light of their commitments to implement OECD standards of transparency and effective exchange of information. As a result, there is no committee blacklist at present.
Aruba made a commitment to abolish the Aruba exempt company regime with effect from December 31 2007. The regime was abolished and a new form of Aruba exempt company was introduced with effect from January 1 2006. Rather than the company itself enjoying tax exemption, only certain qualifying activities are exempt from profit tax and dividend withholding tax.
In early 2009 Aruba found itself on the so-called 'grey list' because it had too few exchange of information treaties with other countries, but on September 10 2009 it was announced that Aruba was no longer on either OECD list. Aruba has signed exchange of information treaties with Australia, the British Virgin Islands, Denmark, the Faroe Islands, Finland, Greenland, Iceland, Norway, St Kitts & Nevis, St Vincent, Spain, Sweden and the United States. In addition, treaties with Belgium, Bermuda, Canada, France and Germany will be signed soon, while negotiations have started with Mexico, Italy, New Zealand and Monaco. Aruba has a tax treaty with the Netherlands and the Netherlands Antilles. However, there are dark clouds on the horizon for Aruba.
A communiqué from the Pittsburgh G-20 Summit in September 2009 stated that:
"We [the G-20 nations] stand ready to use countermeasures against tax havens from March 2010. We welcome the progress made by the Financial Action Task Force (FATF) in the fight against money laundering and terrorist financing and call upon the FATF to issue a public list of high-risk jurisdictions by February 2010."
Thus, a new blacklist is in the making and will probably appear in February 2010.
In October 2009 the FATF presented a report on anti-money laundering and combating terrorism financing which criticized Aruba's regime, particularly its lack of transparency. An FATF meeting is planned for February 2010, but if Aruba can show that it is serious about complying with the FATF's standards, it may yet avoid the new blacklist.
The government has prepared an action plan which aims to ensure that Aruba complies with the FATF in future. The plan runs to over 300 pages, but its main proposals, if enacted, would:
The international status of so-called offshore centres can change quickly: on a blacklist one day, in compliance the next. However, even if a jurisdiction is deemed to be compliant, it must be prepared for abrupt changes to the rules. Therefore, the Aruban government has chosen to make rigorous changes to the existing system.
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