Speech by Maud de Boer-Buquicchio, Deputy Secretary General of the Council of Europe

Ceremony of the Opening for Signature of the CoE/OECD Joint Protocol amending the Convention on Mutual Administrative Assistance in Tax Matters

6.30 p.m., 27 May 2010, Paris

Secretary-General,
Excellencies,
Ladies and Gentlemen,

It is a pleasure and honour for me to open for signature together with Mr Gurría the joint CoE/OECD Protocol amending the Convention on Mutual Administrative Assistance in Tax Matters. The initiative to update the Convention on Mutual Assistance in Tax Matters follows a request by the G20 at the London Summit in April 2009. This call came at a time of unprecedented economic crisis.

The combat against tax evasion and fraud is at the heart of the priorities of both our Organisations – respect of the rule of law, the fight against corruption, money laundering and financing of terrorism on one side, and assisting economic development and maintaining financial stability on the other. These phenomena undermine democracy and threaten the sustainability of our social welfare systems, already endangered by the current economic crisis. Indeed, in the end, the cost of tax evaders is being paid for by law-abiding taxpayers. We therefore seized this opportunity to work together.

The Committee of Ministers, the Council of Europe’s executive body, adopted this text on 24 March this year, after lengthy and sometimes difficult negotiations. The contribution of our Parliamentary Assembly, in particular its Rapporteur, Mr Peter Omtzigt, was moreover essential.

Today, we have in front of us an international legal instrument of high quality.

But before we open the champagne, let’s critically assess what we have achieved together.

I will obviously not go into detail on tax matters in front of specialists in finances, taxes and economy in general. The challenge was to reconcile the legitimate needs of States to recover their taxes with fundamental human rights, such as data protection, including those of taxpayers. What a challenge this was!

The Protocol we are opening for signature today will provide a clear legal basis for obtaining co-operation against tax fraud and evasion. It will avoid the risk of States being tempted to look for information on suspected tax evaders outside any legal framework. This instrument will provide more transparency and ensure respect for human rights and the rule of law in this area. This is a major added value.

As you already know, the Convention on Mutual Administrative Assistance in Tax Matters can be applied worldwide and drafters are sincerely hoping to attract many non-Council of Europe and non-OECD States. I am confident that we are going to be successful in that respect. According to some statistics, some 20-40 billion dollars are stolen from developing countries yearly and stashed away in the developed world. This instrument obviously provides developing States a genuine possibility to reclaim at least part of that money.

Until recently, some States were ready to obtain information on suspected tax evaders outside any legal framework, including by obtaining stolen data. An instrument like the one we are opening for signature today should provide more transparency and respect for human rights and the rule of law in this area. This is a major added value.

The G20 also called for action against non co-operative jurisdictions, and specifically requested the Financial Action Task Force (FATF) to revise and reinvigorate the review process for assessing compliance by jurisdictions with the global standards to counter money laundering and terrorist financing. I am pleased to say that MONEYVAL, the
Council of Europe monitoring arm in this field, is a leading partner with the FATF in this global exercise. As a result substantial progress is now being made in many jurisdictions worldwide to better meet and effectively implement international standards in this area.

So, Ladies and Gentlemen, contrary to what some people want to believe, international organisations do not live in ivory towers; the Council of Europe is no exception; with its unique experience in international judicial co-operation and treaty-making, the Council of Europe stands ready to respond to your calls to react rapidly to contemporary challenges in the future which fall within its mandate.

Thank you for your attention and my sincere congratulations to all of you who worked so hard to make this event possible and, in particular, to the female leaders of those countries who gave you the full powers to sign the Convention.