If the Organisation for Economic Cooperation and Development (OECD) and G20 were really concerned about limiting money laundering and tax evasion the effort would be focused on products, not countries; effectiveness, not processes.
When it came to countries, they would be targeting a set of OECD and G20 countries that we know will never be targeted and listed, not a set of small, unconnected countries unable to afford strong response to a deeply political process.
The consequence of the politicisation of efforts against money laundering and tax evasion is dangerous because it facilitates money laundering and tax evasion.
??It is not a game where you gather yourself together to comply and the deed is done. Local financial sectors would sometimes like to paint it so, to help persuade cash-strapped governments to fork out considerable sums to ensure that their jobs are protected.
But those who think so will be lulled into a false sense of security and frequently confounded. Every time they think they have complied, the rules will change in a manner that discriminates against the powerless.
?If you are to stay in the game, you will need to be clever at dealing with financial crime, you will need to sign up to the agreements early and engage the process as much as possible.
In small states there will be real danger that the effort to stay off black lists is so all encompassing that effective financial regulation takes a back seat – another adverse consequence of the current approach.
The second step, therefore, would be to ensure that the two separate tasks of crime prevention and financial regulation are done well by being? ?done separately, through expert institutions, that speak with each other.
I accept the latter may be too much to ask.
If you want to move yourself away from the direct line of fire, focus less on tax efficiency and more on service and regulatory quality. Here is where diversity and breadth makes more sense.
There remains scope for smart advocacy. Although the G20 and OECD initiatives remain deeply political, they are less egregiously so than when OECD countries first began publishing black lists fifteen years ago.
??It is therefore best to plan for the worse, but there is hope for evidence-based arguments to push us towards a less discriminatory and more effective process.
I continue to believe that the best way to press for this, a way that provides no succour to money launderers and tax evaders, is to raise up the issue of the ineffectiveness of current approach of the Global Forum at curbing money laundering and tax evasion, through an annual publication of an index covering all financial centres.
It would be an objective, scientific, rank of actual effectiveness of limiting the tools of money laundering and tax-evasion, following the field study approach of Jason Sharman et al.
It would show that responsible Caribbean financial centres do far, far, better than those imposing the rules and threatening the sanctions.
• ?Avinash Persaud is chairman of Intelligence Capital Limited.