Why hurry?

GROWING peer pressure on countries to exchange information about clients of their financial firms has left tax evaders with few places to hide. Panama was one, but the “Panama Papers” revelations this year have forced it into line: its government is poised to embrace the Common Reporting Standard (CRS), administered by the OECD, a club of mainly rich countries, which is becoming the global benchmark for sharing data. “Automatic”—that is, regular and systematic—exchange is meant to begin in 2017. But some recalcitrants remain. Chief among them is the Bahamas, an archipelago east of Florida and a tax haven of long standing.

Most of the 100-plus countries in the CRS have signed a “multilateral convention” designed to speed up the data-swapping. Although the Bahamas is in the CRS, it is one of a few that have elected instead to strike deals one country at a time—and then only with those with which it already has special data-exchange agreements known as TIEAs. The Bahamas has only 26 of these (not counting TIEAs with other tax havens, which are meaningless). That leaves a lot of gaps. It has only two...Continue reading