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Taxes and Transnational Treaties: Responsive Regulation and the Reassertation of Offshore Sovereignty

Rawlings, Gregory

Description

Regulatory dialogue between states with widely diverging tax systems has emerged as a key feature of Organization for Economic Cooperation and Development (OECD), International Monetary Fund (IMF), and European Union (EU) initiatives on Offshore Finance Centers (OFCs) or tax havens. This has brought together states of differing dimensions in size, population, economy, and power. Where there is such a discrepancy in power between states there is often a temptation to assert a command-and-control...[Show more]

dc.contributor.authorRawlings, Gregory
dc.date.accessioned2015-12-07T22:17:40Z
dc.identifier.issn0265-8240
dc.identifier.urihttp://hdl.handle.net/1885/18681
dc.description.abstractRegulatory dialogue between states with widely diverging tax systems has emerged as a key feature of Organization for Economic Cooperation and Development (OECD), International Monetary Fund (IMF), and European Union (EU) initiatives on Offshore Finance Centers (OFCs) or tax havens. This has brought together states of differing dimensions in size, population, economy, and power. Where there is such a discrepancy in power between states there is often a temptation to assert a command-and-control regulatory approach. This was the initial reading of the OECD's Harmful Tax Practices Project that demanded tax havens - mostly small states in Europe, the Pacific, Indian Ocean, and the Caribbean - repeal financial secrecy legislation and commit to Tax Information Exchange Agreements (TIEAs). As these initiatives have unfolded there has been a transition away from regulation by command-and-control towards responsive regulatory dialogue in which tax havens have been encouraged to cooperate through engagement and active participation. Based on qualitative research with key stakeholders in OFC jurisdictions and multilateral organizations, this article explores this transition towards meta-principles of responsive regulation. The preservation of tax bilateralism has limited the capacity of multilateral organizations to deploy the full range of regulatory techniques, particularly those involving penalty and coercion. Instead all parties, tax haven states and multilateral institutions alike, have been confined to the broadest base of the regulatory pyramid. Responsive regulation can end up having the opposite effect from what is intended where the enforcement peak of the regulatory pyramid is absent. This has resulted in strengthening the sovereignty of small OFC states and has increased international tax competition, rather than reduced it.
dc.publisherBlackwell Publishing Ltd
dc.sourceLaw and Policy
dc.titleTaxes and Transnational Treaties: Responsive Regulation and the Reassertation of Offshore Sovereignty
dc.typeJournal article
local.description.notesImported from ARIES
local.identifier.citationvolume29
dc.date.issued2007
local.identifier.absfor189999 - Law and Legal Studies not elsewhere classified
local.identifier.ariespublicationu4432478xPUB5
local.type.statusPublished Version
local.contributor.affiliationRawlings, Gregory, College of Asia and the Pacific, ANU
local.bibliographicCitation.issue1
local.bibliographicCitation.startpage51
local.bibliographicCitation.lastpage66
local.identifier.doi10.1111/j.1467-9930.2007.00245.x
dc.date.updated2015-12-07T08:11:33Z
local.identifier.scopusID2-s2.0-33846298536
CollectionsANU Research Publications

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