US and Monaco Sign TIEA

Still bending over backwards to get the club of bullies known as the G20 to take Monaco off the so-called "grey list" Monaco and the United States signed a Tax Information Exchange Agreement (TIEA) in Washington DC on Tuesday 8th September. Signing the agreement on behalf of their governments were H.E. Franck Biancheri, Government Counsellor for External Relations and for International Economic and Financial Affairs, and Mr. Neal Wolin, Deputy Secretary of the US Treasury. Similar agreements have been signed with other countries such as Belgium and San Marino and is said to complement existing agreements made in 2001 between AMAF (Monaco’s Banking Association) and the American Internal Revenue Service (IRS) on a national level.

Negotiations with other countries are on-going and the new agreement comes prior to the opening of the General Debate of the 64th Session of the United Nations General Assembly for which H.S.H. the Sovereign Prince will travel to New York to attend on September 23. Biancheri said he was "extremely satisfied" with the agreement, the negotiations for which have been going on for some time between the U.S. and the Department for External Relations in Monaco via the Monegasque Embassy in Washington. In order to be withdrawn from the grey list, Monaco needs to negotiate twelve bilateral agreements of this type. When they have been signed and officialised by the OECD, the Principality will join the white list. Negotiations in this regard are currently underway with about twenty countries.

Once signed, these texts will be integrated into Monaco’s national legislation by Sovereign Decree (I just love that phrase!), complemented by arrangements for their practical enforcement.

More on Monaco and the "Grey List"

Today and tomorrow representatives from Monaco and more than 100 other countries are attending a summit Los Cabos, Mexico, to address economic issues, measures to be taken to increase transparency and exchange of information about banking and fiscal matters. This is a lead-up to the next G20 meeting at Pittsburgh on September 24th and 25th. So far, Monaco has signed 8 out of 12 accords. HSH Prince Albert II has chosen as his envoy to the summit in Mexico one Franck Biancheri. I cannot help but get a bit nervous whenever these issues are discussed and as much as I would like to see Monaco get past it's reputation as the land of 'sunny skies and shady deals' I am a bit relieved that not all of the accords have been agreed to. As I have expressed before, a country like Monaco needs to have some special incentives to attract business and investment. For a country with no natural resources, little chance of expansion and a native population that depends almost entirely on tourism I fear that if Monaco adopts the policies of other countries (most of which are dominated by anti-profit socialists) they could be signing the death warrant of the Monegasque economy. Thankfully, Prince Albert II seems to realize the need for balance and does seem to understand that a good PR-image is half the battle in these situations -hence his efforts to portray Monaco as an environmentalist haven. I hope all goes well and that this new drive for transparency does not thwart the economic freedom that has given Monaco so much prosperity in recent decades.

For more info read the interview with Mr Biancheri here.