Introduction

Small jurisdictions often lack the resources needed to conclude large numbers of tax information exchange agreements (TIEAs) quickly. Even larger jurisdictions may be unable to devote the resources necessary to negotiate TIEAs with small and geographically distant partners. Developing countries face similar resource constraints. To overcome these constraints the OECD has developed a new approach to negotiating TIEAs involving multilateral negotiations leading to the conclusion of bilateral TIEAs.

Modelled on a similar approach developed by the Nordic economies, the method uses a single negotiating team representing the interests of the OECD Member countries to reach agreement on the terms of a TIEA with a non-OECD jurisdiction or group of jurisdictions.  Once agreed, each of the OECD Member countries signs a separate bilateral agreement with the non-OECD jurisdiction.

The Pilot Projects

Many non-OECD jurisdictions expressed interest in the initiative and it was launched in 2009 with the creation of three pilot projects:

• the Southern Caribbean Project, coordinated by the Netherlands;
• the Northern Caribbean Project, coordinated by the United Kingdom; and
• the Pacific Project, coordinated by the OECD Secretariat.
  

The table below shows the OECD and non-OECD jurisdictions participating in the various projects.

Each of these projects has been hugely successful. More than 100 TIEAs have been or will shortly be signed as a result of the initiative. As a result, a number of the participating non-OECD jurisdictions, e.g. Anguilla, Samoa, St. Kitts and Nevis, St. Vincent and the Grenadines and the Turks and Caicos Islands have now moved into the “substantially implemented” category in the Progress Report first published in April 2009. Others have initialled or reached agreement on the text of at least twelve TIEAs and will move into this category as soon as the agreements they have concluded are signed. These include:

• Cook Islands
• Dominica
• Grenada
• Marshall Islands
• St Lucia
• Vanuatu
  

Given the number of agreements that have been negotiated and the time it takes to complete the legal formalities needed to sign them there may be delays of 3 - 4 months between the time an agreement is reached on the text of a TIEA, and its signature.

Recent Developments

As a result of the success of the pilot projects the multilateral negotiations initiative has been extended to three other jurisdictions: Belize, Costa Rica and Liberia. Belize has reached agreement on the text of TIEAs with at least 12 OECD countries. The negotiations with Liberia have only just commenced but are expected to proceed quickly. Negotiations with Costa Rica will commence shortly. These negotiations are being coordinated by the OECD Secretariat.

Next Steps

Because of its proven efficiency, the OECD is encouraging more jurisdictions to participate in the multilateral negotiations initiative. The approach may also be of great benefit to developing countries seeking to reach agreement with smaller jurisdictions and the OECD is looking into this possibility.