Information for local authorities

Ethical Consumer Draft Proposals for Procurement Policy for Local Authorities: addressing the use of tax havens by suppliers


Ethical Consumer is asking local authorities to address the issue of tax havens through their procurement policies.

Île-de-France, one of France's 29 administrative regions, will require financial institutions it works with to provide details to verify that they are not linked to tax havens listed by the state.

The state has a relatively narrow list of 18 such jurisdictions(la liste noire de bercy) :

Anguilla, Guatemala, Niue, Belize, Iles Cook, Panama, Brunei, Iles Marshall, Philippines, Costa Rica, Liberia, Saint-Kitts-et-Nevis, Dominique, Montserrat, Sainte-Lucie, Grenade, Nauru, Saint-Vincent et les Grenadines.

Champagne Ardennes has apparently announced that it wishes to follow suit.

Helsinki has considered such a move but not yet acted.

All French banks have begun to take steps to close their branches and subsidiaries in countries declared to be tax havens by the OECD.

(Source: Tax Justice Network Website, Le Figaro)

In November, we published a more detailed update of developments in other European countries.

The consultancy Sustainability has written:

"Wider efforts to increase transparency within tax havens (for example in combating corruption and organised crime) might also be expected to spill over into greater scrutiny of the role and involvement of multinational companies in tax havens"

Proposed Policy Wording

1. This authority will not make large (over £100,000) contracts for services with or make purchases from any company:

(a) registered in a country on our current list of tax havens

(b) which is part of a company group where the ultimate holding company is registered in a country on our current list of tax havens

2. Companies tendering for contracts will receive positive marks in our supplier ranking system if:

(a) they are not part of a company group of more than one related company, or

(b) if they are part of a company group, no subsidiaries in that group are registered in a country on our current list of tax havens, or

(c) if they are part of a company group with subsidiary companies registered in tax havens they publish sales, profits and tax paid on a country-by-country basis.


Listing tax havens for the purposes of CSR ranking or procurement



In a report issued in 2000, the OECD identified a number of jurisdictions as tax havens according to criteria it had established. Between 2000 and April 2009, all these jurisdictions made formal commitments to implement the OECDs standard of transparency and exchange of information.

"In May 2009, the Committee on Fiscal Affairs decided to remove all three remaining jurisdictions from the list of uncooperative tax havens in the light of their commitments to implement the OECD standards of transparency and effective exchange of information and the timetable they set for the implementation. As a result, no jurisdiction is currently listed as an unco-operative tax haven by the Committee on Fiscal Affairs. "


2. Financial Secrecy Index

The Financial Secrecy Index is a tool created by the Tax Justice Network "for understanding global financial secrecy, corruption and illicit financial flows. By ranking secrecy jurisdictions according to both their secrecy, and the scale of their activities, it allows a politically neutral ranking of the biggest players. The index was launched on October 4, 2011. "

On a practical level, the appearance of substantial economies - such as the USA, UK, Denmark and Spain on this list - means that it cannot serve as a practical listing for the purposes of a policy of the type mentioned above.

The FSI is available here.

3. Other Developments


Ethical Consumer has contructed a working list of Tax Havens using the TJN methodology but with, for practical purposes, some of the larger economies stripped out.

Richard Murphy is also working to develop a standard test for avoidance of UK tax based on an analysis of 5 previous years of accounts.

We are now seeking legal advice on the validity of the above approach and of any alternative options available.


For more information see our tax justice campaign homepage or contact Leonie Nimmo on 0161 266 2929 or leonie[@]