FROM THE OFFICE OF PUBLIC AFFAIRS

Treasury Secretary Lawrence H. Summers today welcomed the OECD's report on the global effort to protect the integrity of national tax systems from harmful tax competition. The report details the OECD's work in this area and identifies 35 jurisdictions as tax havens and 47 tax regimes in OECD member countries as potentially harmful.

"The identification of tax havens and potentially harmful tax regimes is a crucial step in preventing distortions that could undermine the benefits of enhanced capital mobility in today's global economy," said Secretary Summers. "It is our hope that the listed tax haven jurisdictions will take this opportunity to work with the OECD to reform their harmful tax practices."

Last week, the OECD announced that six jurisdictions made commitments to eliminate their harmful tax practices and would therefore not be included in the tax haven list, even if they otherwise would have met the tax haven criteria. OECD member countries committed to eliminate their harmful tax practices in 1998. Those countries will be meeting with many non-member countries this week at a symposium in Paris to further discuss ways to address the global problem of harmful tax competition.

"We encourage all countries to follow the example set by the OECD member countries and six non-member jurisdictions that have committed to eliminate harmful tax practices," Secretary Summers said.

The OECD's Forum on Harmful Tax Practices, which the United States co-chairs, was established in April 1998 to address the growing problem of unfair tax competition. The Forum will continue its efforts by working with cooperative tax havens, developing more detailed guidance to help countries determine whether their tax regimes are actually harmful, and developing and coordinating defensive sanctions.

The full OECD report, entitled "Progress on Identifying and Eliminating Harmful Tax Practices," is available on the OECD web site at: http://www.oecd.org.