FINANCIAL services are set for a welcome boost after the Islands were finally removed from an international ‘grey list’ of countries which fail to comply with global tax transparency standards.

The Governor signed up to an additional seven tax information exchange agreements (TIEAs) while in London this week, taking the total to the requisite 12.

Finance chiefs hope the move will be enough to shrug off the TCI’s image as another dubious tax haven harbouring clandestine bank accounts for tax dodgers.

It comes just weeks before sanctions threatened by G20 nations were due to kick in.

Signatures were put to official pacts with six Nordic Alliance countries – Norway, the Faroe Islands, Finland, Greenland, Iceland and Sweden – on Wednesday. That followed the signing of an agreement with New Zealand on December 11.

Deals are already in place with the UK, Ireland, Netherlands, Denmark and France. Twelve TIEAs are the minimum needed to join the Organisation for Economic Corporation and Development’s (OECD) ‘white list’.

A spokeswoman for the Governor said: “Inclusion on the ‘white list’ will represent a major endorsement of the Turks and Caicos Islands as a transparent financial centre.

“It will enhance the country’s reputation and confidence in its future with the international business community.

“Work will now continue to build on this milestone to take the country well above the current OECD minimum.

“TIEAs have already been agreed with Australia, Canada, Germany and Mexico and these should be signed in the new year.”

She added that negotiations with other jurisdictions were also “progressing well”.

To enable the pacts to take effect, new legislation in the form of the Tax Information Exchange Bill 2009 was recently penned.

Governor Gordon Wetherell described the Bill as a “major step forward” for the country.

“This will be of great value to the financial sector. Tax sharing agreements are very important for transparency and making sure that one jurisdiction is not hiding tax evasion by a resident in another jurisdiction.

“These standards are international and all jurisdictions that want to be involved in the financial services sector need to comply with them,” he told the Weekly News.

Mr Wetherell said achieving global benchmarks would be beneficial to the TCI.

“Practitioners in the industry here want to see a good regulatory and supervisory framework. It’s good for their reputation.”

He added however that the territory could not afford to become complacent after being removed from the grey list.

“It’s important that the bar continues to rise. Once we have agreements signed we need to show a good record of implementing them.”

In April, British Prime Minister Gordon Brown sent letters to all Crown territories ordering them to sign up to TIEAs or face punitive action.

The move followed the G20 summit in London when world leaders pledged to crack down on tax abuse and shadow banking through offshore jurisdictions.

TIEAs help disclose assets that have not been reported in home countries and also enable tax authorities to access information about people seeking to evade payment of tax.

US President Barack Obama has been outspoken in promising to outlaw the furtive practices of tax havens as a key part of reforms to the world’s battered financial system.

The US is said to lose around $100 billion each year due to offshore tax evasion. And the UK’s estimated two million tax dodgers cost Britain more than $2 billion annually.

By Gemma Handy