Automatic exchange of information on financial accounts has reduced bank deposits held in 46 key international financial centres (IFCs) by 25% since 2008, an OECD report has revealed.
Overall, cross-border bank deposits held in 40 key international financial centres by companies and individuals have fallen by 34% from their 2008 peak of $1.6trn, declining by $551bn. The OECD says the onset of automatic exchange of information (AEOI) under the OECD's Common Reporting Standard (CRS) accounts for about two thirds of the decrease. Specifically, it has led to a decline of 20% to 25% in the bank deposits in IFCs, according to preliminary data.
OECD figures show more than 90 jurisdictions participating in a global transparency initiative under the OECD's common reporting standard since 2018 have now exchanged information on 47m offshore accounts, with a total value of around £4.3trn.
The international community has brought about an unprecedented level of transparency in tax matters, which will bring concrete results for government revenues and services in the years to come"
The findings also suggest that exchange of information is promoting tax compliance and reducing offshore hidden wealth.
"The international community has brought about an unprecedented level of transparency in tax matters, which will bring concrete results for government revenues and services in the years to come," said OECD secretary-general Ángel Gurría.
"The transparency initiatives we have designed and implemented through the G20 have uncovered a deep pool of offshore funds that can now be effectively taxed by authorities worldwide. Continuing analysis of cross-border financial activity is already demonstrating the extent that international standards on automatic exchange of information have strengthened tax compliance, and we expect to see even stronger results moving forward," Gurría added.
Deposits of non-bank financial institutions, households, and corporations were assessed. The IFCs considered in the study were taken from an amended IMF list, as follows: Andorra, Anguilla, Antigua and Barbuda, Aruba, Bahamas, Bahrain, Barbados, Belize, Bermuda, BVI, Cayman Islands, Cook Islands, Costa Rica, Curacao, Cyprus, Dominica, Gibraltar, Grenada, Guatemala, Guernsey, Hong Kong, Isle of Man, Jersey, Lebanon, Liechtenstein, Luxembourg, Macau, Malaysia, Malta, Marshall Islands, Mauritius, Monaco, Montserrat, Nauru, Niue, Palau, Panama, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines, Samoa, San Marino, Seychelles, Singapore, Switzerland, Turks and Caicos Islands, United Arab Emirates, Uruguay, and Vanuatu.
The complete study is expected to be published later this year.