BBC News Online: Business

International fight against tax evasion

Representatives from over 40 countries are discussing plans to set up a new international body to curb tax evasion and money laundering.

The proposal is among the issues under debate at a two-day conference involving the seven leading industrial powers, multilateral institutions such as the World Bank and territories accused of being tax havens, which is taking place in Barbados.

Last summer, major economies represented by the Organisation for Economic Cooperation and Development unveiled a blacklist of 35 mainly small islands and territories, which it said were havens for "harmful tax practices".

Blacklisted countries were told that financial sanctions could be imposed if they failed to cooperate with initiatives to curb the problems by July this year.

This latest conference taking place in Barbados has given a forum for countries accused of being tax havens to vent their fury at the sanctions plan, which they say is unfair, has been imposed with out any form of consultation, and could seriously damage their already fragile economies.

The conference has been co-ordinated by the OECD and the Commonwealth Secretariat, which includes former British colonies in the Caribbean and the Pacific with strong offshore financial services industries.

Countries accused of being tax havens hope the OECD will agree to shelve its plan to impose sanctions on blacklisted territories.

In return they will agree to participate in a new international forum charged with stamping out tax evasion and money laundering.

An announcement is expected when the two-day conference ends later on Tuesday.

A spokesman for the OECD said there was agreement on broad principles but procedures still had to be ironed out.