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taxpayers.93 This in turn leads to ways in which taxpayers may minimize or completely

avoid certain taxes and obtain a greater degree of financial privacy.

According to the OECD, the following three main characteristics are found in offshore

financial centers;

  • (1)

    To provide a location for holding passive investments,

  • (2)

    To provide a location for “paper” profits to be booked, and

  • (3)

    To enable taxpayers but particularly with reference to their bank accounts and

financial affairs to be effectively shielded from scrutiny by tax authorities in their

home countries.94

The resulting recommendation clearly is an attempt to dismantle the bank secrecy

provisions which are pivotal to many offshore centers. Recommendation 7 of the Report

states that countries should review their laws, regulations and practices relating to access

to banking information for tax purposes with a view to removing all “impediments” to the

access

to

such

information

by

tax

authorities.95

Despite

the

somewhat

diplomatic

language used in this section of the report, it is suggested at a later portion of the same

report that various actions would be undertaken against regimes deemed harmful tax

competitors. Specifically, the report says it is worth exploring the possibility of

93 Id at page 30. The Report also included mention that the Committee has commissioned a survey of country practices regarding access to bank information for tax purposes. Id at page 21-22 Id at page 45 94 95

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