VZCZCXRO5651
RR RUEHCHI RUEHDT RUEHHM RUEHNH
DE RUEHGP #0381/01 1120224
ZNR UUUUU ZZH
R 220224Z APR 09
FM AMEMBASSY SINGAPORE
TO RUEHC/SECSTATE WASHDC 6630
INFO RUCPDOC/USDOC WASHDC
RUCNASE/ASEAN MEMBER COLLECTIVE
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEHBJ/AMEMBASSY BEIJING 2971
RUEHFR/AMEMBASSY PARIS 0338
RUEHRL/AMEMBASSY BERLIN 0149
RUEHHK/AMCONSUL HONG KONG 6482

UNCLAS SECTION 01 OF 02 SINGAPORE 000381 
 
STATE PASS USTR 
TREASURY FOR RAND 
 
SENSITIVE 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: EFIN OECD SN
SUBJECT: SINGAPORE REACTION TO OECD TAX HAVEN LIST 
 
REF: A. SINGAPORE 294 (NOTAL) B.SINGAPORE 372 
 
¶1.  (SBU) Summary:  Singapore Deputy Secretary of Finance Ng 
Wai Choon, in the course of a meeting with the Charge 
d'Affaires (CDA) on another matter, expressed concern that the 
OECD's process of classifying tax havens is not transparent or 
fair.  The GOS was disturbed that the OECD had not placed Hong 
Kong or Macau on its "gray list," Ng said.  CDA responded that 
he had no instructions but would report Ng's comments to 
Washington.  Ng said the GOS plans to take steps to bring its 
practices on tax information sharing in line with OECD 
standards (ref A).  He said the GOS hopes to open discussions 
on a Double Taxation Treaty with the United States.  Finatt 
noted that the USG has concerns about the "treaty shopping" 
issue.  End Summary. 
 
Singapore Concerned about OECD Process 
--------------------------------------- 
 
¶2.  (SBU) At an April 17 meeting requested by CDA to discuss 
issues relating to Kosovo's bid to join the IMF and World Bank 
(ref B), Singapore's Deputy Secretary of Finance Ng Wai Choong 
raised concerns about the integrity of the OECD's process for 
determining classifications of tax havens, citing the OECD's 
apparently last-minute decision to remove Hong Kong and Macau 
from the lists of jurisdictions altogether.  (Note: The two 
were mentioned only as a footnote to China's rating.)  Ng said 
the GOS believes there should be a transparent, impartial and 
multilateral approach for monitoring and assessing compliance 
with international standards on the part of all jurisdictions, 
onshore and offshore.  The Ministry has written to the OECD 
Secretary General to confirm that the OECD classifies Hong 
Kong and Macau in the same category as other financial centers 
like Singapore, Switzerland and Luxembourg, i.e. jurisdictions 
that have committed to the OECD Standard but have yet to 
substantially implement it.  Without the inclusion of Hong 
Kong and Macau, the GOS believes the process cannot be 
regarded as impartial and trustworthy.  CDA responded that he 
had no instructions but would report Ng's comments to 
Washington.  Ministry of Finance staff told Finatt separately 
that unless Hong Kong and Macau are included "the legal and 
moral basis for any subsequent actions arising from such a 
categorization will also be challenged." 
 
Singapore's Status 
------------------ 
 
¶3.  (SBU) Ng said that the GOS accepts the OECD's 
classification of Singapore as not a "tax haven" but rather a 
"financial center" that has committed to the OECD Exchange of 
Information Standard but has yet to substantially implement 
it.  Ng said he preferred that there be no lists, but 
acknowledged Singapore has shortcomings in sharing of tax 
information.  (Note: The OECD's April 2 list, formally known 
as "A Progress Report on the Jurisdictions Surveyed by the 
OECD Global Forum in Implementing the Internationally Agreed 
Tax Standard," is available at 
http://www.oecd.org/dataoecd/38/14/42497950.p df.  End Note.) 
 
 
Singapore Still Interested in Tax Treaty with USG 
--------------------------------------------- ---- 
 
¶4. (SBU) Ng relayed Singapore's continued interest in 
negotiating a Double Taxation Treaty (DTA) with the United 
States.  He said the GOS plans to take steps to bring its 
practices on tax information sharing in line with OECD 
standards.  (Note: Previous discussions between Singapore and 
U.S. Treasury tax policy experts in the fall of 2006 had 
faltered on two key areas of disagreement:  (1) Singapore's 
limits on exchanging information and (2) the U.S. policy of 
limiting benefits to Singaporean individuals and companies to 
avoid "treaty shopping" or use of a bilateral tax treaty by 
third-country entities.)  Doreen Tan, the Ministry of 
Finance's Chief Tax Policy Officer, said the upcoming changes 
to Singapore's tax laws should overcome the disagreement over 
information sharing.  Finatt noted that the USG also has 
concerns about the "treaty shopping" issue.  Tan could not 
confirm whether there had been a change in GOS views with 
respect to the U.S. requirement to limit benefits to avoid 
treaty shopping. 
 
SINGAPORE 00000381  002 OF 002 
 
 
 
SHIELDS