Stephen Platt comments on second US Bill designed to deter offshore tax evasion

A second draft bill has been filed in Washington on offshore tax evasion which, according to compliance specialist and financial crimes lawyer, Stephen Platt, would be more favourable to Jersey than the existing Stop Tax Haven Abuse Bill.

Stephen Platt, chairman of the BakerPlatt Group, believes there is no doubt Washington will act against offshore tax havens but at present there is no consensus amongst policymakers about how to proceed.

The Stop Tax Haven Abuse Bill, instigated by Senator Carl Levin, has to date (March 17th ) only found support from four senators out of 100 in the Senate and 62 co-sponsors in the House of Representatives, out of more than 450, and is therefore losing some of its momentum. Its progress has been further disrupted by the announcement of an alternative bill by Senator Max Baucus, Chairman of the Senate Finance Committee.

’For Washington to take no action is not an option. There are two distinct proposals on the table and my instinct is that the Baucus Alternative is preferred. Senator Baucus is close to the administration, he is a leading Democrat and he heads an extremely influential committee,’ he said.

It has previously been announced that the Levin Bill would have a blacklist of so called ’offshore secrecy jurisdictions’ which includes Jersey, Guernsey and the Isle of Man, despite their track record of high regulatory standards and international co-operation in combating financial crime. He believes that should the Stop Tax Haven Abuse Bill progress, it will not be possible for any location to have its name removed from the black list until after the Bill is passed into law.

But Stephen Platt believes that the momentum is moving away from the Levin Bill, thankfully for Jersey, and that the Baucus Alternative is more likely to be the preferred option of the Obama Administration.

According to Stephen Platt, the Baucus Alternative avoids the compilation of a black list of offshore secrecy jurisdictions, but still includes some strong measures in the fight against offshore tax evasion and gives additional powers to the American Inland Revenue Services (IRS), and it would therefore be the better option for offshore jurisdictions such as Jersey.

Stephen Platt, who spoke to various political advisers in a recent Washington visit, was impressed with their knowledge of the offshore industry. ’It would be wrong to assume that the advisers to these Senate committees do not have a very thorough understanding of the different nuances of offshore jurisdictions,’ he said.

ENDS