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PRESS RELEASE
May 20, 2009
LLOYD DOGGETT
ADVERTISEMENT
REPRESENTATIVE
HOUSE
REP. DOGGETT AND SENATOR LEVIN URGE THE ADMINISTRATION TO
POSTPONE PANAMA FTA PENDING A CRACKDOWN ON TAX HAVENS
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copyright or other notice from copies of the content.For Immediate Release
Rep. Doggett and Senator Levin Urge the Administration to Postpone Panama FTA Pending a Crackdown on Tax Havens
Contact: Wyeth Ruthven (Rep. Doggett) 202-225-4865
May 20, 2009
Washington, DC -U.S. Congressman Lloyd Doggett (D-TX) and Senator Carl Levin (D-MI) urged President Obama to make approval of the Panama Free Trade Agreement contingent on Panama's cooperation with efforts to combat international tax evasion. Congressman Doggett and Senator Levin are the authors of the Stop Tax Haven Abuse Act that targets offshore tax evasion and was recently endorsed by the Obama Administration.
"In this time of economic distress, we can no longer afford to ignore the billions of dollars of tax revenue lost to the U.S. Treasury due to the bank secrecy practices of Panama and other tax havens," wrote Doggett and Levin. "Implementing an agreement on trade while ignoring Panama's status as one of the world's recognized tax havens would not only undermine your efforts to address offshore tax evasion, but would also thwart the best opportunity our nation will have to obtain cooperation from a country that has resisted for years American efforts to encourage changes to its secretive banking and regulatory practices."
Below is the text of the letter.
May 20, 2009
The Honorable Barack Obama
President of the United States
The White House
Washington, DC 20500
Dear Mr. President:
As authors of the Stop Tax Havens Abuse Act which would restrict the use of offshore tax havens and abusive tax shelters, we appreciate Ambassador Kirk's recognition that the Panama Free Trade Agreement should not be approved without first securing Panama's commitment to cooperate with international efforts to combat international tax evasion. Implementing an agreement on trade while ignoring Panama's status as one of the world's recognized tax havens would not only undermine your efforts to address offshore tax evasion, but would also thwart the best opportunity our nation will have to obtain cooperation from a country that has resisted for years American efforts to encourage changes to its secretive banking and regulatory practices.
The United States has been engaged in negotiations with Panama on a tax information exchange agreement (TIEA) since 2002, with no progress to show for the effort. In fact, despite committing to the OECD internationally agreed tax standard in 2002, which calls for the exchange of information on request in all tax matters for the administration and enforcement of domestic law, Panama has not signed a tax treaty or a TIEA with any country. Panama is also home to large numbers of offshore banks and shell corporations. Its multiple levels of bank secrecy mean that, without an effective TIEA, Panama's portion of the billions of U.S. taxpayer dollars stashed in offshore banks will continue to evade U.S taxation.
Accordingly, we strongly urge that the United States require Panama to sign a TIEA prior to entering into an FTA, and that the implementation of any FTA should not take effect until Panama adopts enabling legislation to amend Panama's domestic laws to allow for sufficient transparency and access to financial and corporate information. Given Panama's history of recalcitrance on this matter, if the United States agrees to the FTA before Panama signs a TIEA and makes the necessary changes to its domestic laws, we will never secure Panama's assistance in preventing tax evasion.
In this time of economic distress, we can no longer afford to ignore the billions of dollars of tax revenue lost to the U.S. Treasury due to the bank secrecy practices of Panama and other tax havens. Given Panama's interest in successfully concluding the U.S.-Panama FTA, it is essential that we not waste the opportunity to insist on real cooperation from Panama in the fight against international tax evasion. Insisting that Panama both sign an effective TIEA and change its bank secrecy laws before the FTA can go into effect sends a strong signal about the commitment of the United States to shutting down tax havens. Both of these steps by Panama are essential to secure our support of the FTA.
We look forward to hearing from you on this important matter.
Sincerely,
Lloyd Doggett, Member of Congress
Carl Levin, United States Senator
cc: The Honorable Ron Kirk
United States Trade Representative
600 17th Street, NW
Washington, DC 20508
cc: The Honorable Timothy Geithner
Secretary of the Treasury
U.S. Department of the Treasury
1500 Pennsylvania Avenue, NW
Washington, DC 20220