The battle over taxing offshore accounts

UCLA Law Review

Volumn 60, Issue 2, 2012, Pages 304-383

  Grinberg, Itai ^a  

^a GEORGETOWN UNIVERSITY LAW CENTER   (United States)

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EID: 84874730957     PISSN: 00415650     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Article

References (287)

1. BOS. CONSULTING GRP., GLOBAL WEALTH 2011: SHAPING A NEW TOMORROW 13(2011), available at http://www.bcg.com.pl/doaiments/fUe77766.pdf.
2. Lynnley Browning, Ex-UBS Banter Pleads Guilty in Tax Evasion, N. Y. TIMES, June 20, 2008, at Cl;
3. Carter Dougherty & Mark Landler, Tax Scandal in Germany Fans Claims of Inequity, N. Y. TIMES, Feb. 18, 2008, at C8;
4. Liechtenstein Tax Evasion Scandal-Informant in German Investigation 'Fears for His Life, SPIEGEL ONLINE INTTL, Mar. 3, 2008, http://ww.spiegel.de/ international/business/0, 1518, 540283, 00.html.
5. See Press Release, U. S. Dep't of Treasury, U. S. Engaging With More Than 50 Jurisdictions to Curtail Offshore Tax Evasion (Nov. 9, 2012), http://www.treasury.gov/press-center/press-release/Pages/tgl759.aspx.
6. See, e.g., Agreement Between the Government of the United States of America and the Government of the United Kingdom of Great Britain and Northern Ireland to Improve International Tax Compliance and to Implement FATCA, U. S.-UK, Sept. 12, 2012, available at http://www.treasury.gov/resource-center/tax- poliq'/treaties/Documents/FATCA-Agreement-UK-9-12-2012.pdf
7. Press Release, U. S. Dep't of Treasury, Treasury Releases Model Intergovernmental Agreement for Implementing the Foreign Account Tax Compliance Act to Improve Offshore Tax Compliance and Reduce Burden: Agreement Developed With France, Germany, Italy, Spain and the United Kingdom Marks Important Milestone in Combatting Offshore Tax Evasion (July 26, 2012), http://www.treasury.gov/press-center/press-releases/Pages/tgl653.aspx;
8. Finanzausschuss Anbörungen: Umsetzungsgesetz zum Abkommen Deutschland-Schvieiz (BT-Drs. 17/10059)
9. Stellungnahmen [Finance Committee Hearings: Implementation Act for the Germany-Switzerland Treaty (BT-Drs. 17/10059): Opinions], BUNDESTAG, http://Avww.bundestag.de/bundestag/ausschuessel7/a07/anhoerungen/2012/098/ Stellungnahmen/index.html (last visited Oct. 30, 2012).
10. See Press Release, U. S. Dep't of Treasuiy, Joint Statement From the United States, France, Germany, Italy, Spain and the United Kingdom Regarding an Intergovernmental Approach to Improving International Tax Compliance and Implementing FATCA (Feb. 7, 2012), http://www.treasury.gov/press-center/press- releases/Documents/020712 Treasury IRS FATCA Joint Statement.pdf [hereinafter Joint Statement I];
11. MODEL INTERGOVERNMENTAL AGREEMENT TO IMPROVE TAX COMPLIANCE AND TO IMPLEMENT FATCA (2012), available at http://www.treasury.gov/press-enter/press- rdeases/Documents/reciprocaLpdf [hereinafter MODEL LNTERGOVERNMENTAL AGREEMENT].
12. Protokoll zur Anderung des am 21. September 2011 in Berlin unterzeichneten Abkommens zwischen der Schweizerischen Eidgenossenschaft und der Bundesrepublik Deutschland iiber Zusammenarbeit in den Bereichen Steuern und Finanzmarkt [Protocol Amending the Agreement Between the Swiss Confederation and the Federal Republic of Germany on Cooperation in the Area of Taxation and Financial Markets Signed in Berlin September 21, 2011], Ger.-Switz., Apr. 5, 2012 (Ger.), available at http://www.news.ao!mm.cri/NSBSubscriber/message/ attachments/26526.pdf [hereinafter Ger.-Switz. Protocol Amendment];
13. Protocol Amending the Agreement Between the United Kingdom of Great Britain and Northern Ireland and the Swiss Confederation on Cooperation in the Area of Taxation, U. K-Switz., Oct. 6, 2011, auaiable at http://www.hmrc.gov. uk/taxtreaties/protocol-amend-ukswiss-agree.pdf [hereinafter U.rC-Switz. Protocol Amendment];
14. Abkommen zwischen der Schweizerischen Eidgenossenschaft und der Republik Österreich über the Zusammenarbeit in den Bereichen Steuern und Finanzmarkt [Agreement Between the Swiss Confederation and Austria on Cooperation in the Area of Taxation and Financial Markets], Austria-Switz., Apr. 13, 2012 (Ger.), available at http://www.news.admin. ch/N SB Subscriber/message/attachments/26559.pdf [hereinafter Austria-Switz. Cooperation Agreement].
15. Press Release, U. S. Dep't of Treasury, U. S. & Switz., Joint Statement From the United States and Switzerland Regarding a Framework for Cooperation to Facilitate the Implementation of FATCA (June 21, 2012), http://www.treasury.gov/press-center/press-releases/Documents/FATCA Joint Statement US-Switzerland.pdf [hereinafter Joint Statement II]. See Part II. B.3, infra, for a full discussion of this legislation, commonly known as "FATCA"
16. See, e.g., Andrew K. Rose & Mark M. Spiegel, Offshore Financial Centres: Parasites or Symbionts?, 117 ECON. J. 1310 (2007).
17. See, e.g., Vito Tanzi, Globalization, Technological Developments, and the Work of Fiscal Termites, 26 BROOK. J. INTL L. 1261, 1262, 1274-75 (2001).
18. The G20 comprises nineteen member countries and the European Union. The members are Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Republic of Korea, Russia, Saudi Arabia, South Africa, Turkey, the United Kingdom, the United States, and the European Union. Members, G20, http://www.g20.org/index.php/en/members (last visited Oct. 30, 2012).
19. G20, DECLARATION ON STRENGTHENING THE FINANCIAL SYSTEM-LONDON SUMMIT (2009) [hereinafter APRIL 2009 LONDON COMMUNIQUE], available at http://www.g20.utomnto. ca/2009/2009ifi.pdf.
20. One of the strongest statements came from Indian Prime Minister Manhoman Singh, who suggested that the "G-20 countries should take the lead in agreeing to automatic exchange of tax related information with each other... in the spirit of our London Summit [declaration] that 'the era of bank secrecy is over." PM Asks G-20 to Send Strong Message to Stop Tax Evasion, IBN LIVE, http://ibnlive. in. com/news/send-strong-message-on-tax-evasion-pm-to-g20/ 198996-2.html (last updated Nov. 3, 2011).
21. The Tax Justice Network has been particularly active and effective in encouraging civil society to focus on automatic exchange of tax information. TAX JUST. NETWORK, http://www.taxjustice.net (last visited Oct. 15, 2012).
22. Hiring Incentives to Restore Employment Act of 2010 (HIRE Act), Pub. L. No. 111-147, §§ 501-535, 124 Stat. 71, 97-115;
23. See generally Agreement Between the Swiss Confederation and the United Kingdom of Great Britain and Northern Ireland on Cooperation in the Area of Taxation, U. K.-Switz., Oct. 6, 2011 [hereinafter U. K.-Switz. Cooperation Agreement], available at http://www.hmrc.gov. uk/taxtreaties/swiss.pdf;
24. Mutual Agreement Implementing Article XVIII of the Protocol Signed on 20 March 2012, Amending the Agreement Between the Swiss Confederation and the United Kingdom of Great Britain and Northern Ireland on Cooperation in the Area of Taxation, U. K.-Switz., Apr. 18, 2012 [hereinafter U. K.-Switz. Protocol Letters], available at http://www.hmrc.gov. uk/taxtreaties/swiss-uk-letters.pdf (increasing the minimum rate payable from 19 percent to 21 percent and increasing the rate payable on £7 million or more to 41 percent).
25. See also Abkommen zwischen der Bundesrepublik Deutschland und der Schweizerischen Eidgenossenschaft über Zusammenarbeit in den Bereichen Steuern und Finanzmarkt [Agreement Between the Federal Republic of Germany and the Swiss Confederation on Cooperation in the Area of Taxation and Financial Markets], Ger.-Switz., Sept. 21, 2011 (Ger.) [hereinafter Ger.-Switz. Cooperation Agreement], available at http://www.news.admin. ch/NSBSubscriber/ message/attachments/24360.pdf
26. Ger.-Switz. Protocol Amendment, supra note 5;
27. Austria-Switz. Cooperation Agreement, supra note 5.
28. Additionally, it was announced on June 12, 2012, that Italy and Switzerland are working to revise their double taxation agreement.
29. See SWISS FED. DEPT OF FIN., SWiTZERLAND-ITALYTAX DOSSIER (2012), available at http://www.news. admin. ch/NSBSubscriber/message/attachments/27146. pdf.
30. See Austria-Switz. Cooperation Agreement, supra note 5.
31. BOS. CONSULTING GRP., supra note l, at 13.
32. The only article of which I am aware that addresses the differences between all the emerging information reporting models in any detail is Stafford Smiley, Qualified Intermediaries, the EU Savings Directives, Trace-What Does FATCA Really Add?, CORP. TAX'N, Sept.-Oct. 2011, at 20.
33. Susan C. Morse, Ask for Help, Uncle Sam: The Future of Global Tax Reporting, 57 VILL. L. REV. (forthcoming 2012), available at http://papers.ssm. com/sol3/papers.cfrn?abstract-id=1999101.
34. Richard Harvey wrote an article focused on FATCA's implementation, but it does not discuss the international context or odier emerging approaches. J. Richard Harvey, Jr., Offshore Accounts: Insiders Summary of FATCA and Its Potential Future, 57 VILL. L. REV. (forthcoming 2012), available at http://papers.ssrn. com/sol3/papers.cfm?abstract-id= 1969123.
35. See generally Jefferson P. Van der Wolk, The New World of Tax Information Exchange, 13 ASIA-PAC. J. TAX'N 166(2009), available at http://papers.ssm.com/ sol3/papers.cfm?abstract-id=1582452.
36. see Michael J. Graetz & Itai Grinberg, Taxing International Portfolio Income, 56 TAXL. REV. 537, 579-80 (2003).
37. Stephen D. Krasner, Structural Causes and Regime Consequences: Regimes as Intervening Variables, 36 InTLORG. 185, 186 (1982).
38. See generally Richard M. Bird & Eric M. Zolt, Redistribution via Taxation: The Limited Role of the Personal Income Tax in Developing Countries, 52 UCLA L. REV. 1627 (2005).
39. Diane Ring, International Tax Relations: Theory and Implications, 60 TAX L. REV. 83 (2007).
40. See, e.g., Tax Convention With the United Kingdom (T. Doc. 107-19) and Protocols Amending Tax Conventions With Australia (T. Doc. 107-20) and Mexico (T. Doc. 108-3): Hearing Before the S. Comm. on Foreign Relations, 108th Cong. 9 (2003)
41. Treaty Doc. 112-01: Protocol Amending Tax Convention With Swiss Confederation;
42. Treaty Doc. 111-08: Protocol Amending Tax Convention With Luxembourg;
43. Treaty Doc 111-07: Tax Convention With Hungary, Treaty Doc 110-23: Investment Treaty With Rwanda; Treaty Doc. 111-06: Mutual Legal Assistance Treaty With Bermuda: Hearing Before the S. Comm. on Foreign Relations, 111th Cong. (2011) (statement of Manal Corwin, Int'l Tax Counsel, U. S. Dep't of Treasury).
44. See Steven Dean, The Incomplete Global Market for Tax Information, 49 B. C. L. REV. 605, 648-53 (2008)
45. OECD, ARTICLES OF THE MODEL CONVENTION WITH RESPECT TO TAXES ON INCOME AND ON CAPITAL art. 26 (2008) [hereinafter OECD MODEL CONVENTION].
46. OECD, OVERVIEW OF THE OECD'S WORK ON COUNTERING INTERNATIONAL TAX EVASION (2009) [hereinafter OECD, COUNTERING INTERNATIONAL TAX EVASION].
47. See OECD MODEL CONVENTION, supra note 25, art. 26.
48. Compare OECD, AGREEMENT ON EXCHANGE OF INFORMATION ON TAX MATTERS art. 5 [hereinafter OECD TIEA], available al http://www.oecdorg/ctp/ hannfultaxpractices/2082215.pdf
49. with OECD, UPDATE TO ARTICLE 26 OF THE OECD MODEL TAX CONVENTION AND ITS COMMENTARY ¶ 5. 2 [hereinafter OECD, 2012 UPDATE], available at http://www.oecd.org/ctp/exchangeofinformation/latest documents/120718-Article 26-ENG-no cover (2).pdf.
50. See BOS. CONSULTING GRP., supra note 1, at 13.
51. See Lyniity Browring, Banking Scandal Unfolds Lite a Thriller, N. Y. TIMES, Aug. 15, 2008, at C8;
52. Investigators Find 'Immense Evasion: Over 160 Tax Dodgers Confess in Liechtenstein Probe, SPIEGEL ONLINE InTL, Feb. 26, 2008, http://www.spiegel.de/ mternational/business/0, 1518, 537839, 00. html;
53. Liechtenstein Tax Evasion Scandal: Informant in German Investigation 'Fears'for His Life, supra note 2.
54. DOJ Announces Deferred Prosecution Agreement With UBS, TAX NOTES TODAY, Feb. 19, 2009, available at LEXIS, 2009 TNT 31-32.
55. APRIL2009 LONDON COMMUNIQUE, supra note 11, at 4.
56. See, e.g., David Crawford & Jesse Drucker, Swiss to Relax Bank Secrecy Laws, WALL ST. J., Mar. 14, 2009, http://oiume.wj.com/article/ SB123694252262918343.html.
57. OECD TIEA, supra note 26, art. 5 (5);
58. see also OECD MODEL CONVENTION, supra note 25, art. 26.
59. See John Christensen & David Spencer, Stop This Timidity in Ending Tax Haven Abuse, FIN. TIMES, Mar. 5, 2008, at 13, available at http://www.ft.com/intl/cms/s/0/63cdb642-ea03-lldc-b3c9-0000779fd2ac html.
60. But see OECD, 2012 UPDATE, supra note 26, ¶ 5.2 (changing the Commentary to Article 26 of the OECD Model Convention explicitly to authorize requests relating to a group of unidentified taxpayers in certain circumstances).
61. See Carter Dougherty & Mark Landler, Tax Scandal in Germany Fans Complaints of Inequality, N. Y. TIMES, Feb. 18, 2008, http://www.nytimes.com/ 2008/02/18/usiness/worldbusiness/18tax.html
62. See H. Arnold Sherman, The War on Offshore Tax Evasion, STEP J., Sept. 2010, http://www.stepjournalorg/journal-arduve/2010/stepjoujrnal-septem
63. See Joint Declaration by the Government of the Principality of Liechtenstein and Her Majesty's Revenue and Customs Concerning the Memorandum of Understanding Relating to Cooperation in Tax Matters, Liech.-U. K., Aug. 11, 2009, available at http://www.hmrc.gov. uk/international/joint-declaration-lich. pdf.
64. Randall Jackson, U. S. Offers 11 Swiss Banks Deals to End Tax Evasion Investigation, 134 TAX NOTES 71 (2012).
65. U. K-Switz. Cooperation Agreement, supra note 15;
66. Ger.-Switz. Cooperation Agreement, supra note 15.
67. See, e.g., Hiring Incentives to Restore Employment Act of 2010 (HIRE Act), Pub. L. No. 111-47, §§ 501-535, 124 Stat. 71, 97-115 ("Foreign Account Tax Compliance");
68. see also PM Asks G-20 to Send Strong Message to Stop Tax Evasion, supra note 12.
69. BOS. CONSULTING GRP., supra note 1, at 13.
70. see also MERRILL LYNCH & CAP GEMINI, WORLD WEALTH REPORT 6 (2011).
71. see also OECD DEV. ASSISTANCE COMM., REFLECTION EXERCISE: INVESTING IN DEVELOPMENT: A COMMON CAUSE IN A CHANGING WORLD 3(2009), available at http//www.oecd.org/dataoecd/14/l/43854787.pdf (noting that official development assistance totaled $120 billion in 2008).
72. See, eg., DEV KAR & DEVON CARTWRIGHT-SMTTH, GLOBAL FIN. INTEGRITY, ILLICIT FINANCIAL FLOWS FROM DEVELOPING COUNTRIES 2002-2006 (2009)
73. CLEMENS FUEST & NADINE RIEDEL, TAX EVASION, TAX AVOIDANCE AND TAX EXPENDITURES IN DEVELOPING COUNTRIES: A REVIEW OFTHE LITERATURE, at vi (2009) (emphasis omitted).
74. Ramjethmalani v. Union of India, (2011) 8 S. C. C. 1, 14 (India).
75. See AUSTL. NATX AUDIT OFFICE, AUDIT REPORT NO. 34 2009-10, THE MANAGEMENT AND USE OF DOUBLE TAXATION AGREEMENT INFORMATION COLLECTED THROUGH AUTOMATIC EXCHANGE 37(2010), available at http://www.anao.gov. au/uploads/documents/2009- 10-Audit-Report%20-34.pdf.
76. At least as early as 1970, the U. S. Congress was concerned about the issue, as it noted in a congressional report accompanying the passage of the Bank Secrecy Act of 1970, Pub. L. No. 91-508, 84 Stat. 1114
77. which stated: "[T]hese days when the citizens of this country are crying out for tax reform and relief, it is grossly unfair to leave the secret foreign bank account open as a convenient avenue of tax evasion. " H. R. REP. NO. 91-975, at 4 (1970)
78. reprinted in 1970 U. S. C. CAN. 4394, 4397;
79. see also Thomas Rixen & Peter Schwarz, How Effective Is the European Union's Savings Tax Directive? Evidence From Four EU Member States, 50 J. COMMON MARKET STUD. 151, 152 (2012) (arguing that agreement on the EU Savings Directive in 2003 was the product of thirty-five years of negotiations). Indeed, French concerns with tax evasion through Swiss banks predate World War II.
80. See Debats Parlementaires, No. 87, Chambre des Deputes, Seance du 10 novembre 1932, 1932 J. O. 2997.
81. Note that the OECD developed the first paper-based protocol for automatic information exchange in 1981. OECD, Recommendation of the Council Concerning a Standardised Form for Automatic Exchanges of Information Under International Tax Agreements, OECD Doc. C (81) 39/FINAL (May 5, 1981).
82. See, e.g., Charles-Henry Courtois, The Impact of the European Commission on the Council of Ministers' Decisions in the Field of European Taxation: The Case of the European Savings Directive, 2 INTL PUB. POLY REV. 26, 30 (2006);
83. Alex Easson, The Tax Competition Controversy, 18 TAX NOTES INTL 371, 371 (1999) (describing how a 1989 EU Commission predecessor proposal to the Savings Directive was "quickly dropped").
84. see also Claudio M. Radaelli, Harmful Tax Competition in the EU: Policy Narratives and Advocacy Coalitions, 37 J. COMMON MARKET STUD. 661 (1999).
85. See OECD, IMPROVING ACCESS TO BANK INFORMATION FOR TAX PURPOSES (2000), available at http://ww.oecd. Org/aWcKxcV3/7/2497487.pdf;
86. OECD, HARMFUL TAX COMPETITION: AN EMERGING GLOBALlSSUE (1998), available at http://www.oecd.org/dataoecd/33/0/1904176.pdf.
87. See, e.g., Angel Gurria, Secretary-Gen., OECD, Address at the Parliamentary Assembly Session of the Council of Europe (Oct. 6, 2010), available at http://hub.coe.int/parliamentary-assemblysessions/all-session-news- october-2010/statement-by-angel-gurria
88. See, e.g., OECD, Recommendation of the Council on the Use of Tax Identification Numbers in an International Context, OECD Doc. C (97) 29/FINAL (Mar. 13, 1997) [hereinafter OECD, Recommendation on Tax Identification Numbers];
89. OECD, Recommendation of the Council on the Use of the Revised OECD Standard Magnetic Format for Automatic Exchange of Information, OECD Doc. C (97) 30/FINAL (Mar. 13, 1997);
90. OECD, Recommendation of the Council on the Use of the OECD Model Memorandum of Understanding on Automatic Exchange of Information for Tax Purposes, OECD Doc C (2001) 28/FINAL (Mar. 22, 2001);
91. Tool Kiton Automatic Exchangetf lnfbrmation, OECD, http://www.oecd.org/ document/18/0,3746,en-2649-33767-40499474-1-1-1-1,00.html (last visited Oct. 31, 2012).
92. See, e.g., AUSTL. N AT'L AUDIT OFFICE, supra note 51, at 93-95.
93. I. R. C. § 871 (2006 & Supp. V 2011).
94. See U. S. MODEL INCOME TAX CONVENTION OF NOVEMBER 15, 2006, art. 10, at 16-17 (2006) [hereinafter U. S. MODEL INCOME TAX CONVENTION], available at http://www.treasury.gov/press-center/press-releases/Documents/hpl6801.pdf.
95. OECD, REPORT OF THE INFORMAL CONSULTATIVE GROUP ON THE TAXATION OF COLLECTIVE INVESTMENT VEHICLES AND PROCEDURES FOR TAX RELIEF FOR CROSSBORDER IN VESTORS ON POSSIBLE IMPROVEMENTS TO PROCEDURES FOR TAX RELIEF FOR CROSS-BORDER INVESTORS 8 (2009) [hereinafter OECD, ICG REPORT], available at http://www.oecd.org/dataoecd/34/19/41974569.pdf.
96. See, e.g., William L. Burke, Tax Information Reporting and Compliance in the Cross-Border Context, 27 VA. TAX REV. 399, 403-04 & n. 11, 407-08 & n. 22 (2007).
97. U. S. GOV'T ACCOUNTABILITY OFFICE, GAO-08-99, TAX COMPLIANCE: QUALIFIED INTERMEDIARY PROGRAM PROVIDES SOME ASSURANCE THAT TAXES ON FOREIGN INVESTORSARE WITHHELD AND REPORTED, BUT CAN BEIMPROVED 12 (2008) [hereinafter GAO, QUALIFIED INTERMEDIARY PROGRAM].
98. see generally Carol Doran Klein & Diane L. Renfroe, The Final Withholding Regulations: A Rube Goldberg Contraption-Will It Work?, 27 TAX MGMT. INTLJ. 67 (1998).
99. See Stephen E. Shay et al., "What's Source Got to Do With It?" Source Rules and U. S. International Taxation, 56 TAX L. REV. 81, 122 (2002).
100. Thomas A. O'Donnell, Philip Marcovici & Marnin J. Michaels, The New U. S. Withholding Tax Regime: To Be or Not to Be, a "Qualified Intermediary 27 TAX PLANNING INT'L REV. 3, 4 (2000).
101. See generalfy Tax Haven Banks and U. S. Tax Compliance: Hearing Before the Permanent Subcomm. on Investigations of the S. Comm. on Homeland Sec & Gov't Affairs, 110th Cong. (2008).
102. GAO, QUALIFIED INTERMEDIARY PROGRAM, supra note 68, at 6-11.
103. Proposal for a Council Directive on a Common System of Withholding Tax on Interest Income, COM (89) 60 final (Feb. 10, 1989) (proposing a Council
104. See Taxation and Customs Union: Rules Applicable, EUR. COMM'N, http://ec.europa.eu/taxation-customs/taxation/personal-tax/savings-tax/ rules-applicable/mdex-en.htm (last visited Oct. 15, 2012).
105. George Peter Gilligan, Whither or Wither the European Savings Tax Directive? A Case Study in the Political Economy of Taxation, 11 J. FIN. CRIME 56, 59 (2003).
106. Albertina M. Fernández & Thomas F. Field, Canadian Tax Foundation Holds First World Tax Conference, 20 TAX NOTES INT'L 1056, 1056 (2000)
107. Edward Alden et al., US Endangers Brown Saving Tax Plan, FIN. TIMES, Sept. 26, 2002, at 1.
108. See OECD MODEL CONVENTION, supra note 25, art. 26.
109. See Switzerland: Year in Review, WORLDWIDE TAX DAILY, Dec. 29, 2005, available at LEXIS, 2005 WTD 249-5.
110. See, e.g., Agreement Between the European Community and the Principality of Monaco Providing for Measures Equivalent to Those Laid Down in Council Directive 2003/48/EC, 2005 O. J. (L 19) 55.
111. See, e.g., Agreement Between the European Community and the Swiss Confederation Providing for Measures Equivalent to Those Laid Down in Council Directive 2003/48/EC, 2004 O. J. (L 385) 30;
112. OECD, ICG REPORT, supra note 66, at 2-3.
113. OECD & COUNCIL OF EUR., THE MULTILATERAL CONVENTION ON MUTUAL ADMINISTRATIVE ASSISTANCE IN TAX MATTERS: AMENDED BY THE 2010 PROTOCOL (2011) [hereinafter OECD & COUNCIL OF EUR., MULTILATERAL CONVENTION], available at http://dx.doi.org/10.1787/9789264115606-en.
114. The Convention on Mutual Administrative Assistance in Tax Matters-Background, OECD. ORG (June 4, 2010), http://www.oecd.org/document/2/0, 3746, en-2649-33767-44886082-1-1-1-1, 00.html.
115. APRIL 2009 LONDON COMMUNIQUE, supra note 11, at 5.
116. Sections 1471 to 1474 of the Internal Revenue Code were enacted in the Foreign Account Tax Compliance title (Title V) of the Hiring Incentives to Restore Employment Act of 2010 (HIRE Act), Pub. L. No. 111-147, §§ 501-535, 124 Stat. 71, 97-115.
117. An earlier version of the Foreign Account Tax Compliance tide of the HIRE Act was introduced in Congress as the Foreign Account Tax Compliance Act. The acronym FATCA stuck with these provisions. 99. The statutory effective date is January 1, 2013, but as of the fall of 2012 regulatory guidance had effectively delayed implementation of FATCA by one year. Chapter 4 Implementation Notice 2011-53, 2011-32 I. R. B. 124, 2011 WL 2741154. U. S. accounts are technically defined as financial accounts that are held by specified U. S. persons or U. S.-owned foreign entities. I. R. C. § 1471 (d) (1) (A) (Supp. V2011). Financial accounts are broadly defined to pull in interests in hedge funds, private equity funds, and other investment arrangements.
118. I. R. C. § 1471 (c) (1) (C).
119. See Regulations Relating to Information Reporting by Foreign Financial Institutions and Widiholding on Certain Payments to Foreign Financial Institutions and Other Foreign Entities, 77 Fed. Reg. 9022 (Feb. 15, 2012)
120. (to be codified at 26 C. F. R. pts. 1, 301).
121. HIRE Act, 156 Cong. Rec. S1745, S1745 (daily ed. Mar. 18, 2010)
122. More technically, withholdable payments generally include any payment of fixed or determinable annual or periodical income, if such payments are from sources within the United States, and gross proceeds from the sale or other disposition of any property of a type that can produce interest or dividends from sources within the United States. I. R. C. § 1473 (1) (A).
123. The term "passthru payment" means any withholdable payment or other payment to the extent attributable to a withholdable payment. I. R. C. § 1471 (d) (7).
124. As part of the foreign financial institution (FFI) Agreement, Section 1471 requires participating FFIs to deduct and withhold a tax equal to 30 percent of any passthru payment that is made by the participating FFI to a recalcitrant account holder or a nonparticipating FFI. I. R. C. § 1471 (b) (1) (D) (i).
125. See I. R. S. Notice 2011-34, at 2-3, 2011-1 C. B. 765, auailable at http://www.irs.gov/pub/irs-drop/n-ll-34.pdf
126. MODEL INTERGOVERNMENTAL AGREEMENT, sufranote 4, arts. 4 (1) (e), 6 (2).
127. The statute defines recalcitrant account holders as those account holders that fail to comply with reasonable requests for information by a participating FFI in order for it to meet its reporting obligations under an FFI Agreement or that fail to provide a waiver in any case in which any foreign law would (but for such waiver) prevent the reporting of any information an FFI is required to report under its FFI Agreement. I. R. C. § 1471 (d) (6).
128. I. R. C. § 1471.
129. See, e.g., Letter From Faye M. Polayes, Tax Counsel, HSBC N. Am., to Manal Corwin, Intl Tax Counsel, U. S. Dep't of the Treasury, Michael Danilack, Deputy Comm'r (Intl), IRS, and Steve Musher, Assoc. Chief Counsel, IRS (June 7, 2011), available at http://www.deloitte.com/assets/Dcom-UmtedSmtes/ Locd%20Assets/Dccunents/Tax/us-tax-HSBC-060711-WithCopyright-062311.pdf;
130. Alison Bennett, U. S. Open to Intergovernmental Approach To FATCA Information Sharing, Official Says, DAILYTAX REP., Dec. 19, 2011, at G-11.
131. see also John Herzfeld, Financial Institutions: FATCA Rules in Final Review Stages; McMahon Notes Billions in Offshore Yields, DAILY TAX REP., Jan. 25, 2012, at G-4
132. On the same date, the United States issued a similar joint statement with Japan. Press Release, U. S. Treasury Dep't, Joint Statement From the United States and Japan Regarding a Framework for Intergovernmental Cooperation to Facilitate the Implementation of FATCA and Improve International Tax Compliance (June 21, 2012), http://www.treasury.gov/press-center/press-releases/Documents/ FATCAJointStatementUS-Japan.pdf.
133. Claude-Alain Margelisch, Foreword to SWISS BANKERS ASS'N, WEALTH MANAGEMENT IN SWITZERLAND: STATUS REPORT AND TRENDS 2, 2(2011), auailable at http://vAvw.swissbanking.ch/en/20110107-bro-vermoegens verwaltungsgeschaeft-rva. pdf.
134. See generally Austria-Switz. Cooperation Agreement, supra note 5;
135. Greece Seek Withholding Tax Agreement With Swiss, STEP J. (Oct. 31, 2011), http://www.stepj'ournal.org/news/news/secondary-news/greece-seeks- withholding-tax-a.aspx;
136. see also Christiane Schlötzer, Die Spur der Scheme [The Track of the Bills], SÜDDEUTSCHE. DE (Apr. 28, 2012), http://www.sueddeutsche.de/ wirtschafi/steuerabkommen-zwischen-schweiz-und-griechenland-die-spur-derscheine- 1.1344218 (Ger.);
137. Giuseppe Fonte, Italy Senate Urges Swiss-Italy Tax Deal, REUTERS (Sept. 16, 2011), http://www.reuters.com/article/2011/09/16/italy-tax-idUSL5E7KG2VH 20110916.
138. Armando Mombelli, Segnali di disgelo nella vertenza fiscal [Signs of Thaw in Tax Dispute], SWISS1NFO. CH (May 3, 2012), http://www.swissinfo.ch/ita/ politica/Segnali-di-disgelo-nella-vertenza-fiscale-.html?cid=32616442 (It.).
139. As of late November 2011, French Budget Minister, Valerie Pecresse, opposed a similar agreement with Switzerland. France Has a "Choice" on Tax Says Calmy-Rey, SWISSINFO. CH (Nov. 25, 2011, 9:11 AM), http://www.swissinfo.ch/eng/politics/France-has-a-choice-on-tax-says-Calmy-Rey. html ?cid=31636338.
140. BOS. CONSULTING GRP., supra note 1, at 13.
141. But see Matthew Allen, Rubik Tax Treaties Face Serious Hurdle, SWISSINFO. CH (Nov. 25, 2011, 1:33 PM), http://www.swissinfo.ch/eng/Specials/Rebuilding- the-financial-sector/Spotlight-on-banMng-seaecy/Rubik-tax-treaties-face-serious- hurdle.html?cid=31638262 (noting that France has "closed the door" on an anonymous withholding agreement and describing the EU Commission's legal objection to anonymous withholding);
142. Steuerabkommen mit der Schweiz?-Italien winkt (noch) ab [Tax Treaty With Switzerland?-Italy (Still) Demurs], SCHWEIZER FERNSEHEN [SWISS TV] (Dec. 8, 2011, 12:58 AM), http://www.tagesschau.sf.tv/Nachrichten/Archiv/2011/12/08/ Schweiz/Steuerabkommen-mit-der-Schweiz-Italien-winkt-noch-ab (Ger.)
143. Press Release, Swiss Fed. Dep't of Fin., Switzerland and Germany Initial Tax Agreement (Aug. 10, 2011), http://www.efd.admin. ch/dokumentation/ medieninformationen/00467/index.html?lang=en8onsg-id=40533 [hereinafter Switzerland and Germany Initial Tax Agreement].
144. The Austrian-Swiss agreement foresees a 25 percent tax rate. Press Release, Swiss Fed. Dep't of Fin., Switzerland and Austria Sign Withholding Tax Agreement (Apr. 13, 2012), http://www.news.admin. ch/message/index.html?lang= en&rnsg-id=44130.
145. See, e.g., Press Release, Swiss Fed. Dep't of Fin., Switzerland and the UK Initial Tax Agreement (Aug. 24, 2011), http://www.sif.admin. ch/0088/index.html?lang=en&msg-id=40731.
146. See, e.g., Matthew Allen, Ist das Schweizer Bankgebeimnis gerettet?, SWISSINFO. CH (Oct. 29, 2011, 3:16 PM), http://www.swissinfo.ch/ger/Wirtschaft/ Furianzsektor-im-Umbruch/im-RampenHcht/Ist-das-Schweizer-Bankgheimnis-gerettet. html?cid=28660632.
147. See, e.g., Letter From Mary Richardson, Dir. of Regulatory & Tax Dep't, Alt. Inv. Mgmt. Ass'n, to Steven Musher, Assoc. Chief Counsel, Int'l, IRS, and Manal Corwin, Int'1 Tax Counsel, U. S. Dep't of the Treasury: Foreign Account Tax Compliance ('FATCA') (June 29, 2010) [hereinafter AIMA Letter], auailable at http://www.bsrrdegal.com/PDFs/AIMAsubmissionto USTreasuryandIRSreFATCA29June.pdf
148. BRITISH BANKERS' ASS'N, NOTICE 2010-60, NOTICE AND REQUEST FOR COMMENTS REGARDING IMPLEMENTATION OF INFORMATION REPORTING AND WITHHOLDING UNDER CHAPTER 4 OF THE CODE (Oct. 29, 2010), available at http://www.bsmlegal.com/PDFs/FATCA- BBA-20101029.pdf;
149. see also BRITISH BANKERS' ASS'N, NOTICE 2011-34, SUPPLEMENTAL NOTICE TO NOTICE 2010-60 PROVIDING FURTHER GUIDANCE AND REQUESTING COMMENTS ON CERTAIN PRIORITY ISSUES UNDER CHAPTER 4 OF SUBTITLE A OF THE CODE (June 7, 2011), available at http://www.deloitte.com/assets/Dcom-UrutedStates/Ixxal%20Assets/ Documents/Tax/us-tax-British-Bankers-Ass-06072011-061611.pdf.
150. See, e.g., Letter From Intl Council of Sec. Ass'ns to Timothy Geithner, Sec'y, U. S. Dep't of the Treasury, and Douglas H. Shulman, Comm'r, IRS: Implication of the Foreign Account Tax Compliance Act (FATCA) (June 28, 2011), available at http://www.icsa.bz/img/letter-pdf/ICSA-FATCA-Letter-Jun-2011.pdf ("Rather than the unilateral approach taken by FATCA, we suggest that a more appropriate approach would be the development of a global framework that would allow the US and other governments to obtain information regarding income paid to citizens of their countries by foreign financial institutions which is in harmony with each jurisdiction's existing laws and does not create an excessive compliance burden for financial institutions.");
151. Letter From the Dutch Banking Ass'n to Stephen E. Shay, Deputy Assistant Secy, U. S. Treasury, et al.: Comments of the Dutch Banking Association on the Foreign Account Tax Compliance Act, as Well as Notice 2010-60 and Notice 2011-34, at 1 (June 9, 2011), available at http://www.deloitte.com/assets/Dcom- UmtedSates/Local%20Assets/Documents/Tax/us-tax-NBV-060911-090811.pdf (The Dutch Banking Association... would suggest a coordinated approach of states similar to what has been done in the area of transfer pricing, where through development of common concepts compliance efforts have been limited to a manageable position for taxpayers.");
152. Letter From Eur. Banking Fed'n & Inst, of Intl Bankers to Stephen E. Shay, Deputy Assistant Secy for Intl Tax Affairs, U. S. Dep't of the Treasury, et al.: Comments on Notice 2010-60 Providing Preliminary Guidance on FATCA (Nov. 12, 2010), available at hrtp://www.deloitte.com/assets/Dcom-UnitedStates/Local %20Assets/Documents/Tax/us-tax-EBF-IIB-FATCA-Comment-Letter-Novl2-121010.pdf (making similar comments).
153. Letter From Capital Mkts. Tax Comm. of Asia to Jeffrey Owens, Dir., CTPA, OECD (Aug. 18, 2010), available at http://ww.oecd.org/data oecd/40/60/46019879. pdf.
154. SWISS BANKERS ASS'N, TATIGKEITSBERICHT 2009/2010 [2009-2010 ANNUAL REPORT] (2010), http://www.swissbanking.org/en/taetigkeitsbericht-2010.pdf [hereinafter 2009-2010 ANNUAL REPORT].
155. U. S. Dep't of State, What Is tie OECD?, USMISSION. GOV, http://usoecd.usmission. gov/mission/overview.html (last visited Oct. 16, 2012).
156. SWISS BANKERS ASS'N, WEALTH MANAGEMENT IN SWITZERLAND 7(2009), available at http://www.finanzplatzzuerich.ch/Dortals/1/Documents/DE/Smdien/ Wealtlimanagement2009-sbvg-0109[1].pdf.
157. Cf. Michael Keen & Jenny E. Ligthart, Information Sharing and International Taxation 3 (Tilberg Univ. Discussion Paper No. 2004-117, 2004), available at http://arno. uvt.nl/show.cgi?fid=12179
158. See JANE G. GRAVELLE, CONG, RESEARCH SERV., R40623, TAX HAVENS: INTERNATIONAL TAX AVOIDANCE AND EVASION (2009), available at http://assets.opencrs.com/rpts/R40623-20090709.pdf;
159. Joseph Guttentag & Reuven Avi-Yonah, Closing the International Tax Gap, in BRIDGING THE TAX GAP: ADDRESSING THE CRISIS IN FEDERAL TAX ADMINISTRATION 99 (Max B. Sawicky ed., 2005).
160. Tax Haven Abuses: The Enablers, the Tools and Secrecy: Hearing Before the Permanent Subcomm. on Investigations of the S. Comm. on Homeland Sec. & Gov't Affairs, 109th Cong. 33, 45 (2006).
161. See, e.g., Statement by Defendant in Advance of Plea of Guilty, United States v. Taylor, No. 2:08-CR-00064-TC (D. Utah Jan. 24, 2008);
162. Statement by Defendant in Advance of Plea of Guilty, United States v. Petersen, No. 2:05-CR-O0805-TC (D. Utah Jan. 18, 2008);
163. GAO, QUALIFIED INTERMEDIARY PROGRAM, supra note 68, at 23 (describing the 2007 indictment of an adult entertainment mogul for using offshore companies that he owned to overstate business and personal expenses while concealing his ownership of those companies);
164. Barton Massey, Convicted Bank Chairman Is Key to Dozens of New Tax Haven Cases, 19 TAX NOTES INTL 959, 959-60 (1999);
165. see also Tax Haven Banis and U. S. Tax Compliance: Hearing Before the Permanent Subcomm. on Investigations of the S. Comm. on Homeland Sec & 'Gov't Affairs, 110th Cong. 17-18 (2008).
166. See OECD, SEOUL DECLARATION, THIRD MEETING OF THE OECD FORUM ON TAX ADMINISTRATION (2006) (expressing concern of thirty-five tax commissioners and deputy tax commissioners from OECD and non-OECD economies regarding outright fraud to conceal income and assets using offshore business entities);
167. see also, e.g., ASSEMBLEE NATIONALE, COMMISSION DES FINANCES, RAPPORT D'INFORMATION No. 1902, at 147-56 (2009) (Fr.), available at http://www.assemblee-nationale.fr/13/pdf/rap-info/il902.pdf;
168. Gesetz zur Bekampfung der Steuerhinterziehung (Steuerhinterziehungsbekampfungsgesetz) [Act to Fight Against Tax Evasion (Tax Evasion Act)], July 29, 2009, BGBLI at 2302 (Ger.), available at http://www.bundesfinanz ministerium.de/Content/DE/Publikationen/Aktuelle- Gesetze/Gesetze-Verordnungen/040-SteuerhinterziehunsbekG-anLpdf?-blob= publicationFile8cv=3
169. U. S. MODEL INCOME TAX CONVENTION, supra note 65, art. 26 (1).
170. Protocol to the Convention for the Avoidance of Double Taxation With Respect to Taxes on Income ¶10, U. S.-Switz., Oct. 2, 1996, 27 U. S. T. 1996 [hereinafter Protocol to 1996 Convention], available at http://wvwire.gov/pub/ire-trty/swss.rxffi
171. See Transparency Intl Switz., Tax Fraud and Tax Evasion, http://vww.transparency.ch/financial centre/pages/taxfraud.php (last visited Nov. 1, 2012)
172. X. Ltd. gegen Eidgenossische Steuerverwaltung (ESTV) [X. Ltd. v. Swiss Fed. Tax Admin.], Bundesverwaltungsgericht [B VGE] [Federal Administrative Court] May 5, 2009, A-7342/2008 & A-7426/2008, at 33 (Switz.), available at http://www.odaformation permanente.net/details/a-07342-2008-2009-03-05-t-1.pdf.
173. See HM TREASURY, U. K., EXCHANGE OF INFORMATION AND THE DRAFT DIRECTIVE ON TAXATION OF SAVINGS ¶ 3(2000), available at http://archive.treasuiy.gov. uk/docs/2000/eoi.html.
174. See OECD, Recommendation on Tax Identification Numbers, supra note 59;
175. see also David E. Spencer, OECD Information Exchange Recommendations Are a Significant First Step in Resolving Tax Evasion, 8 J. INTITAX'N 353 (1997);
176. MODEL INTERGOVERNMENTAL AGREEMENT, supra note 4, art. 6 (4)
177. See Report From the Commission to the Council in Accordance With Article 18 of Council Directive 2003/48/EC on Taxation of Savings Income in the Form of Interest Payments, at 2, COM (2008) 552 final (Sept. 15, 2008) (emphasizing the need for TINs and with that caveat suggesting exchange is workable through preexisting channels of communication established among EU member states).
178. 2009-2010 ANNUAL REPORT, supra note 148, at 17.
179. But see Letter From Dr. Jakob Schaad & Urs Kapalle, Swiss Banking Ass'n, to Manal Corwin, Deputy Assistant Sec y of Tax Policy (Intl), U. S. Dep't of the Treasury, Michael Danilack & Steve Musher, IRS: FATCA Notice 2011: Submission of the Swiss Bankers Association (June 10, 2011), available at http://www.deloitte.com/assets/Dcom-UnitedStates/Local%20Assets/Documents/Tax/ us-tax-SBA-061011-NOCOPYRIGHT NEEDED-062311.pdf
180. See STEPHEN D. KRASNER, SOVEREIGNTY: ORGANIZED HYPOCRISY 33-40 (1999).
181. Cf. Kyle Bagwell & Robert W. Staiger, National Sovereignty in an Interdependent World 1 (Natl Bureau of Econ. Research, Working Paper No. 10249, 2004), available at http://www.nber.org/papersAvl0249.pdf
182. See James Aim & Benno Torgler, Culture Differences arid Tax Morale in the United States and in Europe, 27 J. ECON. PSYCHOL. 224, 228 (2006) ("[T]ax morale is likely to be influenced by such factors as perceptions of fairness, trust in the institutions of government, the nature of the fiscal exchange between taxpayers and government, and a range of individual characteristics.");
183. Leandra Lederman, The Interplay Between Norms and Enforcement in Tax Compliance, 64 OHIO ST. L. J. 1453, 1477 (2003) ("[T]he development of a sense that others are contributing is likely an important factor in tax compliance.").
184. See, e.g., Dan M. Kahan, Trust, Collective Action, and Law, 81 B. U. L. REV. 333 (2001) (discussing this research). Put another way, reciprocation hinges on contributors' perceptions that they are not being taken advantage of.
185. see also Eric A. Posner, Law and Social Norms: The Caseof Tax Compliance, 86 VA. L. REV. 1781, 1784-85 (2000).
186. See Richard M. Bird, Jorge Martinez-Vazquez & Benno Torgler, Societal Institutions and Tax Effort in Developing Countries (Ctr. for Research, Econ. Mgmt, & the Arts Working Paper No. 2004-21, 2004), auailable at http://ssm.com/abstract=662081.
187. See Ronald G. Cummings et al., Tax Morale Affects Tax Compliance: Evidence From Surveys and an Artefactual Field Experiment, 70 J. ECON. BEHAV. & ORG. 447, 456 (2009).
188. James Aim & Jorge Martinez-Vazquez, Institutions, Paradigms, and Tax Evasion in Developing and Transition Countries, in PUBLIC FINANCE IN DEVELOPING AND TRANSITIONAL COUNTRIES 146, 151 (Jorge Martinez-Vazquez & James Alm eds., 2003);
189. see also Bruno S. Frey & Benno Torgler, Tax Morale and Conditional Cooperation, 35 J. COMP. ECON. 136 (2007) (arguing that noncompliance by other taxpayers tends to decrease a taxpayer's tax morale and compliance).
190. See, e.g, Tim Lister, Tax Evasion Is a National Pastime Afflicting Southern Europe, CNN, Nov. 2, 2011, http://artides.cnn. com/2011-11-02/opinion/ opinion-europe-shadow-economies-1-tax-evasiontax-collection-tax-rates?-s=PM: OPINION.
191. Michael Backhaus & Angelika Hellemann, Sigmar Gabriel: "Und wir sol/ten the Burger daruber abstimmenlassen, "Teil 2 [Sigmar Gabriel.-"And We Should Let the Citizens Vote on It", Part 2], BILD (Sept. 25, 2011, 12:16 AM), http://www.bildde/politik/inland/signmr-gabriel/wir- muessen-die-eureformieren-die-buerger-abstimmen-lassen-teil-2-20134564.bild. html (Ger.);
192. Clive S. Gray, Enhancing Transparency in Tax Administration in Madagascar and Tanzania (Ait. Econ. Policy Discussion Paper No. 77, 2001), avdailable at http:///pdf.usaid.gov/pdf-docs/PNACM656.pdf.
193. See Aristide R. Zolberg, Strategic Interactions and the Formation of Modern States: France and England, 32 INTL SOC. SCI. J. 687, 712 (1980).
194. See generally NIALL FERGUSON, THE CASH NEXUS: MONEY AND POWER IN THE MODERN WORLD, 1700-2000, at 81-106 (2001);
195. MARGARET LEVI, OF RULE AND REVENUE (1988);
196. Robert H. Bates & Da-Hsiang Donald Lien, A Noteon Taxation, Development, and Representative Government, 14 POL. & SOC'Y 53 (1985);
197. Robert H. Bates, The Economics of Transitions to Democracy, 24 PS: POL. SCI. & POL. 24 (1991).
198. See also DOUGLASS C. NORTH, INSTITUTIONS, Institutional Change and Economic Performance 49 (1990);
199. CHARLES TILLY, COERCION, CAPITAL, AND EUROPEAN STATES, AD 990-1990, at 96-114 (1990);
200. Martin C McGuire & Mancur Olson, Jr., The Economics of Autocracy and Majority Rule: The Invisible Hand and the Use of Force, 34 J. ECON. LITERATURE 72 (1996);
201. Mancur Olson, Dictatorship, Democracy, and Development, 87 AM. POL. SCI. REV. 567 (1993);
202. Michael L. Ross, Does Taxation Lead to Representation?, 34 BRTT. J. POL. SCI. 229 (2004) (showing regressions consistent with the hypothesis that higher taxes relative to total government services make states more democratic but inconsistent with the hypothesis that higher taxes relative to income lead to democratization);
203. James E. Mahon, Jr., Liberal States and Fiscal Contracts: Aspects of the Political Economy of Public Finance (Ann. Meeting of the Am. PoL Sci. Ass'n, Conference Paper, 2005), available at http://titation. albcademic.eom//meta/p- mk-apa-research-titation/0/4/0/l/l/pages40115/p40115-l.php.
204. See Hazem Beblawi, The Rentier State in the Arab World, in THE ARAB STATE 85 (Giacomo Luciani ed., 1990);
205. Giacomo Luciani, The Oil Rent, the Fiscal Crisis of the State and Democratization, in DEMOCRACY WITHOUT DEMOCRATS?THE RENEWAL OF POLITICS IN THEMUSUM WORLD 130 (Ghassan Salame ed., 1994);
206. Michael L. Ross, Does Oil Hinder Democracy?, 53 WORLD POL. 325 (2001);
207. see also Thomas L. Friedman, Op-Ed., Drowning Freedom in Oil, N. Y. TIMES, Aug. 25, 2002, http://www.nytimes.conV2002/08/25/opimor/drowning-freedom- in-oil.html.
208. Mick Moore, How Does Taxation Affect the Quality of Governance? (Inst, of Dev. Studies Working Paper No. 280, 2007), available at http://www2.ids.ac.uk/ gdr/cfs/pdfsAVp280.pdf.
209. See Margaret Levi & Audrey Sacks, Achieving Good Government-and, Maybe, Legitimacy (Paper Produced for the World Bank Conference, "New Frontiers of Social Policy", Dec. 12-15, 2005), available at http://site resources.worldbank.org/INTRANETSOCIALDEVELOPMENT/Resources/ACHIEVING GOODGOVERNMENT.pdf (arguing that the legitimacy of what we might consider a good government requires the citizenry to believe that the government is raising funds in an equitable manner in addition to serving the public good).
210. Maureen B. Cavanaugh, Democracy, Equality, and Taxes, 54 ALA. L. REV. 415 (2003);
211. see also MICHAEL J. GRAETZ, 100 MILLION UNNECESSARY RETURNS: A SIMPLE, FAIR, AND COMPETITIVE TAX PLAN FOR THE UNITED STATES 54 (2008) (noting that even schoolchildren conclude that fairness in a democracy involves some degree of progressive taxation based on ability to pay). Some scholars claim that without visibly progressive taxation, public support for growth-inducing policies like free trade may fray and economic populism may become a more pronounced feature of government.
212. See, e.g., ROGER C. ALTMAN ET AL., BROOKINGS INST., PATH TO PROSPERITY: AN ECONOMIC STRATEGYTO ACHIEVE MORE BROADLY SHARED GROWTH 7(2008), available at http://www.brookings.edu/~/media/research/files/papers/2008/l 1/path to prosperity/1 l-path-to-prosperity
213. Kenneth F. Scheve & Matthew J. Slaughter, A New Deal for Globalization, 86 FOREIGN AFF. 34 (2007).
214. see also Wilson Prichard, Taxation and State Building: Towards a Governance Focused Tax Reform Agenda 24 (Inst, of Dev. Studies Working Paper No. 341, 2010), available at http://wvAv2.ids.ac.uk/gdk/cfs/pcUyWp341%20web.pdf
215. BOS. CONSULTING GRR, supra note 1, at 12.
216. See LeoMülla & Enk Nolmans, Steuerabkommm: Daumen drüen, BILANZ (pec. 10, 2011), http://www.bilanz.ch/untemehmen/steuerabkommen-daumen- dmecken.
217. Cooperation Agreement, supra note 15, available at http://www.hmrc.gov. uk/taxtreaties/joint-dec-equivalence.pdf
218. See, e.g., U. K.-Switz. Cooperation Agreement, supra note 15, art. 33.
219. See U. K.-Switz. Cooperation Agreement, supra note 15, art. 36;
220. M. Marshall, World Economy Hinges on China's Bankruptcy Law, Wood Says, VA. LAW (Mar. 16, 2005), http://www.law.virginia.edu/h tm]/news/2005-spr/china- wood.htm.
221. Cf. Pasquantino v. United States, 544 U. S. 349, 379-80 (2005) (Ginsburg, J., dissenting)
222. (quoting Att'y Gen. of Can. v. R. J. Reynolds Tobacco Holdings, Inc., 268 F.3d 103, 119 (2d Cir. 2001))).
223. See, e.g., U. N. Secretariat, Ad Hoc Grp. of Experts on Intl Cooperation in Tax Matters, Mutual Assistance in Collection of Tax Debts, U. N. Doc. ST/SG/AC.8/2001/L.2 (Aug. 30, 2001);
224. ASIF H. QURESM, THE PUBLIC INTERNATIONAL LAW OFTAXATION: TEXT, CASES AND MATERIALS 308 (1994);
225. Alan R. Johnson et al., Reciprocal Enforcement of Tax Claims Through Tax Treaties, 33 TAX LAW. 469, 469-70 (1980).
226. Michael Lennard, The UN Model Tax Convention as Compared With the OECD Model Tax Convention-Current Points of Difference and Recent Developments, ASIA-PAC. TAX BULL., Jan./Feb. 2009, at 4, 10.
227. LEAGUE OF NATIONS, FISCAL COMM., LONDON AND MEXICO MODEL TAX CONVENTIONS: COMMENTARY AND TEXT 100 (1946) ("Model Bilateral Convention for the Establishment of Reciprocal Administrative Assistance for the Assessment and Collection of Direct Taxes: Mexico Draft"); id at 100 ("Model Bilateral Convention for the Establishment of Reciprocal Administrative Assistance for the Assessment and Collection of Taxes on Income, Property, Estates and Successions: London Draft"). Subsequently the OECD developed the Model Convention for Mutual Administrative Assistance in the Recovery of Tax Claims in 1981.
228. OECD, MODEL CONVENTION FOR MUTUAL ADMINISTRATIVE ASSISTANCE IN THE RECOVERY OF TAX CLAIMS: REPORT OF THE OECD COMMITTEE ON FISCAL AFFAIRS (1981).
229. RESTATEMENT (THIRD) OF FOREIGN RELATIONS LAW § 483 (1987) ("Courts in the United States are not required to recognize or to enforce judgments for the collection of taxes, fines, or penalties rendered by the courts of other states.");
230. see also id., reporter's note 1 (citing Holman v. Johnson, (1775) 98 Eng. Rep. 1120 (K. B.)).
231. See, e.g., Brussels Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters, art. 1, Sept. 27, 1968, 1998 O. J. (C 27) 4;
232. Council Regulation 44/2001 of 22 December 2000 on Jurisdiction and the Recognition and Enforcement of Judgments in Civil and Commercial Matters, 2001 O. J. (L 12) 2 (EC) (excluding revenue, customs, and administrative matters from its scope of application via article 1.1 of that regulation).
233. But see European Convention on Mutual Assistance in Criminal Matters art. 1, Apr. 20, 1959, 472 U. N. T. S. 4185
234. The rule as known at common law dates at least to Attorney General v. Lutwydge, a 1729 English court case that held that the court could not enforce a bond executed in Scotland to enforce Scottish import duties on tobacco because the obligation was a foreign tax obligation.
235. Att y Gen. v. Lutwydge, (1729) 145 Eng. Rep. 674 (Ex. Div.);
236. see, e.g., Ludlow v. Van Rensselaer, 1 Johns. 94 (N. Y. 1806) (holding that the defendant could not avoid enforcement of a promissory note on the basis that the plaintiff had violated a French revenue provision requiring French stamp tax first be paid);
237. see also Brenda Mallinak, The Revenue Ride: A Common Law Doctrine fir the Twenty-First Century, 16 DUKE J. COMP. & INT'L L. 79, 79-83 (2006).
238. See, e.g, Banco Nacional de Cuba v. Sabbatino, 376 U. S. 398, 413-14, 448, 450 n. 11 (1964);
239. United States v. Harden, [1963] S. C. R. 566 (Can.);
240. see also Govt of India v. Taylor, [1955] AC. 491 (H. L.) 508 (appeal taken from Eng.);
241. Williams & Humbert Ltd. v. W & H Trade Marks (Jersey) Ltd., [1986] A. C. 368 (H. L.) (appeal taken from Eng.);
242. Peter Buchanan Ltd. v. McVey, [1955] A. C. 516 (Ir. H. Ct. 1950) (surveying application of the revenue rule by U. K. courts)
243. affd, [1955] A. C. 530 (Ir. S. C. 1951);
244. William S. Dodge, Antitrust and the Draft Hague Judgments Convention, 32 LAW & POLY INT' L BUS. 363, 373 n. 43 (2001) (treating the application of the revenue rule in both common law and civil law countries as a subcategory of a disinclination to enforce foreign public law).
245. Vitaly S. Timokhov, Enforcing Tax Judgments Across Borders: How Collection Assistance Can Overcome Limitations of the "Revenue Rule" (Part 1), J. INTL TAX'N, June 2003, at 34, 37;
246. see also Vitaly S. Timokhov, Enforcing Taxjudgments Across Borders: How Collection Assistance Can Overcome Limitations of the "Revenue Rule" (Part 2), 14 J. InT'l TAX'N, Sept. 2003, at 20.
247. See, e.g., Pasquantino v. United States, 544 U. S. 349, 361 (2005) ("[A]t its core, [the revenue rule] prohibited the collection of tax obligations of foreign nations.");
248. Banco Nacional de Cuba, 376 U. S. at 448 (White, J., dissenting) ("[C]ourts customarily refuse to enforce the revenue and penal laws of a foreign state, since no country has an obligation to further the governmental interests of a foreign sovereign. ")
249. quoted in Pasquantino, 544 U. S. at 369-70.
250. GLOBAL FORUM ON TRANSPARENCY & EXCH. OF INFO, FOR TAX PURPOSES, OECD, TAXTRANSPARENCY2011: REPORT ON PROGRESS 2 (2011) [hereinafter GLOBAL FORUM, TAX TRANSPARENCY], available at http://www.oecd.org/tax/transparency/48981620.pdf.
251. See, e.g., Rep. of the Comm. of Experts on Intl Cooperation in Tax Matters, 2d Sess., Oct. 30-Nov. 3, 2006, U. N. Doc. E/C. 18/2006/6/Add. 1;
252. ESCOR, Supp. 45 (2006);
253. G7, ECONOMIC COMMUNIQUÉ: MAKING A SUCCESS OF GLOBALIZATION FOR THE BENEFIT OF ALL ¶ 16(1996), available at http://www.mofa.go.jp/policy/ economy/summit/1996/eco.html;
254. G8, THE GLENEAGLES COMMUNIQUE: AFRICA ¶ 14 (i) (2005), available at http://www.unglobalcompact.org/docs/about-the-gc/government-support/ PostG8-Gleneagles-Communique.pdf;
255. G20, COMMUNIQUE: MEETING OF FINANCE MINISTERS AND CENTRAL BANK GOVERNORS, OCTOBER 15-16, 2005 ¶ 2(2005), available at http://www.mof.go.jp/engiish/ mterrational-policy/convention/g20/g20-051016.pdf
256. OECD, PROMOTING TRANSPARENCY AND EXCHANGE OF INFORMATION FORTAX PURPOSES: A BACKGROUND INFORMATION BRIEF 2 (2010);
257. GLOBAL FORUM, TAX TRANSPARENCY, supra note 224, at 2;
258. see also, e.g., OECD, COUNTERING INTERNATIONALTAX EVASION, supra note 25;
259. OECD, TAX CO-OPERATION 2010: TOWARDS A LEVEL PLAYING FIELD-ASSESSMENT BY THE GLOBAL FORUM ON TRANSPARENCY AND EXCHANGE OF INFORMATION FOR TAX PURPOSES 9, 15 (2010).
260. A "high-level working panel" convened by the United Nations has previously proposed an International Tax Organization to provide a mechanism for multilateral tax information sharing to curb the scope of tax evasion on investment income earned abroad. U. N. Secretary-General, Letter dated June 25, 2001 from the Secretary-General addressed to the President of the General Assembly, U. N. Doc. A/55/1000 (June 26, 2001), available at http://www.un.org/esa/rfd/a55-1000.pdf.
261. Explanatory Report to the Convention as Amended by the Protocol, Protocol Amending the Convention on Mutual Administrative Assistance in Tax Matters, May 27, 2010, E. T. S. No. 127, ¶ 167, auailabel at hrtp://conventions.coe.mt/ Treaty/EN/Rerx) rts/Html/127-Revised.htm.
262. Article III of the 2010 Protocol amends Article 18 of the Multilateral Convention to clarify that a request can be made without the name and address of a specific taxpayer. OECD & COUNCIL OF EUR., MULTILATERAL CONVENTION, supra note 93.
263. See OECD, REVISED EXPLANATORY REPORT TO THE CONVENTION ON MUTUAL ADMINISTRATIVE ASSISTANCE IN TAX MATTERS 22(2010), available at http://www.oecd.org/ctp/exchangeofinformation/48091084.pdf;
264. see also OECD, 2012 UPDATE, supra note 26.
265. See OECD & COUNCIL OF EUR., MULTILATERAL CONVENTION, supra note 93, art. 6.
266. See Status of the Convention on Mutual Administrative Assistance in Tax Matters and Amending Protocol, CETSNo. 127, COUNCIL EUR., http://conventions. cce.int/Tnaty/Commun/ChercheSig.asp?NT=127&CM=1&DF=&CL=ENG (last visited Oct. 31, 2012).
267. For a list of G20 members, see supra note 10. At the November 2011 G20 Summit, all G20 countries also noted, "we will consider exchanging information automatically on a voluntary basis as appropriate and as provided for in the convention. " Cannes Summit Final Declaration-"Building Our Common Future: Renewed Collective Action for the Benefit of All", G20, ¶ 35 (Nov. 4, 2011), http://www.g20-g8.corn/g8-g20/g20/english/for-the- press/news-releases/cannes-summit-final-declara tion. 1557.html.
268. One obvious point is that reciprocal identification and reporting obligations would need to be imposed on financial institutions in all cooperating jurisdictions. This would mean, for example, that U. S. financial institutions would need to exercise the same due diligence to identify accounts of non-U. S. persons and collect precisely the same information on accounts of non-U. S. persons that the United States wishes to receive with respect to U. S. persons widi offshore accounts. Although it has finalized the bank deposit interest regulations, 77 Fed. Reg. 23, 391, 23, 394-95 (Apr. 19, 2012)
269. (to be codified at Treas. Reg. §§ 1.6049-1 to -8)
270. See I. R. S. Notice 2011-34, 2011-1 C. B. 765, available at http://www.irs.gov/pub/irs-drop/n-11-34.pdf.
271. See OECD, TERMS OF REFERENCE: TO MONITOR AND REVIEW PROGRESS TOWARDS TRANSPARENCY AND EXCHANGE OF INFORMATION FOR TAX PURPOSES 6-7 (2010) [hereinafter OECD, TERMS OF REFERENCE], available at http://www.oecd.org/ dataoecd/37/42/44824681.pdf.
272. OECD, REPORT BYTHE PILOT GROUP ON IMPROVING PROCEDURES FOR TAX RELIEFFOR CROSS-BORDER INVESTORS: POSSIBLE IMPROVEMENTS TO PROCEDURES FOR TAX RELIEF FOR CROSS-BORDER INVESTORS: IMPLEMENTATION PACKAGE 9-10(2010), available at http://www.oecd.org/dataoecd/20/36/44556378.pdf
273. See Proposal for a Council Directive Amending Directive 2003/48/EC on Taxation of Savings Income in the Form of Interest Payments, at 15-16, COM (2008) 727 final (Nov. 13, 2008), available at http://ec.europa.eu/taxation- customs/resources/dcxcunents/taxation/rjersonal-tax/savmgs-tax/ savmgs-directive-review/com(2008)727-en.pdf.
274. see Letter From Marylouise Serrato, Exec Dir. & Jackie Bugnion, Dir., Am. Citizens Abroad, to Timothy F. Geithner, Secy, U. S. Dep't of the Treasury, Manal Corwin, Deputy Assistant Secy, U. S. Dep't of the Treasury, Douglas Shulman, Comm'r, IRS ocSteve Musher, Assoc. Chief Counsel (Int'l), IRS (Aug. 31, 2011), available at http://www.deloitte. conVassets/DcomUnitedSmes/ Local%20Assets/Documents/Tax/us-tax-ACA-2011-18533-1-090811.pdf.
275. Regulations Relating to Information Reporting by Foreign Financial Institutions and Withholding on Certain Payments to Foreign Financial Institutions and Other Foreign Entities; Proposed Rule, 77 Fed. Reg. 9021 (Feb. 15, 2012)
276. (to be codified at Treas. Reg. §§ 1. 1471-1.1474).
277. MODEL INTERGOVERNMENTAL AGREEMENT, supra note 4.
278. 77 Fed. Reg. at 9032
279. (to be codified at Treas. Reg. § 1.1471-4 (d) (4)).
280. MODEL INTERGOVERNMENTAL AGREEMENT, supra note 4, art. 5 (2) (a).
281. MODEL INTERGOVERNMENTAL AGREEMENT, supra note 4, art. 6 (2).
282. See OECD MODEL CONVENTION, supra note 25, art. 26 (2);
283. OECD, AGREEMENT ON EXCHANGE OF INFORMATION ON TAX MATTERS, art. 8(2002), available at http://www.oecd.org/dataoecd/15/43/2082215.pdf;
284. OECD, TERMS OF REFERENCE, supra note 234, at 8-9 (describing the globally agreed standard against which all 102 members of the Global Forum are presently being assessed, including terms of reference C, 3. and C.4. regarding protecting against misuse of information and ensuring safeguards for taxpayers);
285. See GLOBAL FORUM ON TRANSPARENCY & EXCH. OF INFO. FOR TAX PURPOSES, OECD, PROGRESS REPORT TO THE G 20(2012), available at http://www.oecd.org/ctp/ exchangeof information/G20-Progress-ReportJune-2012.pdf.
286. See OECD, CONVENTION ON MUTUAL ADMINISTRATIVE ASSISTANCE IN TAX MATTERS: PROCESS TO BECOME A PARTY TO THE AMENDED CONVENTION (n. d.), available at http://www.oecd.org/ctp/exchangeofinformation/Process-to-Become-a-Party-to-the- Amended-Convention.pdf.
287. See GLOBAL FORUM ON TRANSPARENCY & EXCH. OF INFO. FOR TAX PURPOSES, OECD, REVISED METHODOLOGY FOR PEER REVIEWS AND NON-MEMBER REVIEWS (2011), available at http://ww.oexd.org/ctp/44824721.pdf.