Spain cannot have it both ways on tax transparency agreements say PDP

Spain "cannot have it both ways" says Gibraltar's Progressive Democratic Party.

In a statement today, which reflect my views on this issue completely (not the first time I agree entirely with the PDP I will add), the PDP say Spain "cannot constantly prosecute an unjustifiable campaign aimed at tarnishing our (Gibraltar's) finance centre for not co-operating and then when Gibraltar signs an exchange of information agreement with the United States make a diplomatic protest to the US".

The PDP statement follows reports of a complaint by the Spanish Foreign Ministry to the United States over an agreement for the exchange of tax information which the US signed with Gibraltar at the G20 Summit, at the end of March.

The PDP statement today argues that the agreement with the US "followed the same format as those with the Channel Islands", and added:

"It is absolutely right that the Government should have signed the Agreement directly and without any presence of the United Kingdom chaperoning proceedings."

In their statement today, Keith Azopardi, the PDP leader explains that Gibraltar "is fiscally sovereign and has the power to enter into these Agreements".

"Indeed, the PDP would have objected if the UK had signed such an Agreement on Gibraltar’s behalf because it would have amounted to a clear erosion of our constitutional competences."

Mr Azopardi, who served as Deputy Chief Minister of Gibraltar and Minister for Trade and Industry until 2003, in the incumbent GSD (Gibraltar Social Democrats) Government, said this was "precisely the condition" that he mentioned to the US when they first raised the possibility of signing such an Agreement during his tenure as Minister responsible for Financial Services.

Mr Azopardi is urging the Government to now "move ahead and sign up to further Agreements "so that Gibraltar’s finance centre can be placed on the OECD (Organisation for Economic Co-operation and Development) 'white-list' and taken off the so-called ‘grey’ list, a list of offshore 'jurisdictions that have committed to internationally agreed tax standards' but that have not yet substantially implemented these agreements.

Concluding the PDP statement, Mr Azopardi says the Government "has wasted the last five years" and that it should now "accept realities":

"The Government has wasted the last five years when it was obvious to all as far back as 2003 that the global environment was changing and that it would be necessary to sign up to these Agreements.

The Channel Islands started to do so in 2002 and we have lost ground in this area because of the Government’s reluctance to accept realities.

While the PDP support the signing of this Agreement it is clearly insufficient and the Government now needs to move far more quickly to catch up with our competitors!"

Amen to that Keith... Well said!

Spain's protests over US - Gibraltar tax agreement is laughable

Oh what a surprise... as once again Spain complains about Gibraltar... and this time, it really is quite laughable!

Spain's ABC daily is reporting today that the Spanish Foreign Ministry has made a formal complaint to the United States over an agreement for the exchange of tax information which the US signed with Gibraltar on 31st March.

ABC reports that the protest does not object to the agreement itself, which is considered to be positive (oh that's very good of them), but to the fact that it was signed before the Gibraltar and United States flags, as if, the paper says, "Gibraltar were independent". The British flag was not present at the signing!! Yikes!!

ABC says Luis Felipe Fernández de la Peña, the Foreign Ministry’s general director for Europe and North America, called both the US Embassy’s chief of business affairs, Arnold Chacón, and the UK Ambassador, Denise Holt, to the Foreign Ministry to pass on Spain’s objections. (Rhubarb... don't make me laugh!!)

According to ABC, London is said to have stated that delegations from the UK and Washington took part in the signing, and that normal UK protocol was followed. Spain is understood to be studying if the delegation referred to by the UK authorities is legally valid, ABC said.

The agreement signed in London by Gibraltar’s Chief Minister, Peter Caruana, and the US Treasury Secretary, Tim Geithner, is the first of a series of Tax Information Exchange Agreements which Gibraltar has committed to enter into this year.

This particular agreement was signed just days before the OECD (Organisation for Economic Co-operation and Development) published its report on progress by world financial centres towards implementing an internationally agreed standard on exchange of tax information. Gibraltar appears on the so-called ‘grey’ list, a list of offshore 'jurisdictions that have committed to internationally agreed tax standards' but that have not yet substantially implemented these agreements.

Sheesh... Gibraltar cannot win! Spanish politicians are forever complaining about Gibraltar being a 'fiscal paradise', constantly banging on with allegations (untrue) about money laundering and that we haven't signed any international agreements on tax transparency... then when Gibraltar does sign an agreement, Spain complains about it!

Mind you, to question the possible legalities of the delegation, I find is truly laughable and just shows how they clutch at straws to have a go at Gibraltar!

D'uh!! It was an agreement between Gibraltar and the USA... NOT between the UK and the USA... so it's hardly surprising that the flags present at the time were those of the USA AND Gibraltar... and NOT the UK's!!

If Spain's behaviour and constant whingeing and complaining wasn't so irritating (if not stupid as in this instance) it would be laughable. This particular one is like watching a Monty Python sketch for Christ sakes!!

Maybe they'd like to explain why they continue to refuse to enter into a tax transparency agreement with Gibraltar... (as Gibraltar has officially offered to do on at least two ocassions now). Might it have anything to do with the reasons I give in my post last week??

Damn risible hypocrites! Baaah! I wonder how long it will be, before we hear from Blanca Luz... climbing on this latest bandwagon??

"So please your Majesty, to singe the King of Spain's beard; it has grown somewhat too long."

Want another laugh?

If you would like to have another laugh you might want to have a look at the comments left by some Slop radicals on the ABC report.

One of them... manu-ao says:

"Muy bien y encima les hacemos un aeropuerto para que se muevan con mas holgura, aeropuerto que solo usan los ingleses y llanitos porque a iberia le resulta costoso por los pocos pasjeros que lo utilizaban.Entre tanto la princesa Ana paseandose tan chula por gibraltar , Obama con su amigo Zapatero,y los españoles presenciando un espectaculo lamentable."

For those non-hispanic speakers reading this, basically this guy is making some ridiculous complaint about Gibraltar's ingratitude, especially after "THEY... built us our airport"!!! Ha ha!!

I haven't got the heart to answer and correct him. Actually... to be honest, I just cannot be bothered... but it just goes to show how pathetically ill informed and twisted these radical slops are!

There are many other idiotic and ill informed remarks there too... including another one who is not aware that the actual date when Gibraltar was given away by Spain, "in perpetuity" in the, now anachronistic, Treaty of Utrecht was in 1713. This guy is convinced it was in 1710 and had something to do with Catalunya!

If anyone doesn't know and wishes to be informed about the history of Gibraltar Airport... have a look here: Gibraltar Airport @ Wikipedia, the free encyclopedia.

Gibraltar reiterates tax transparency agreement offer with Spain

The Gibraltar Government yesterday issued a statement reiterating that it has offered Spain an agreement providing for exchange of information, transparency and co-operation in tax matters in the fight against money laundering and regulation of the financial system.

The Government statement reiterated that the offer to share tax information with Spain "is not new".

A spokesperson for the Chief Minister's Office at No 6 added that it was also not "difficult to reach such an agreement at this time", a statement in response to comments made earlier last week by Spanish PSOE MP, Salvador de la Encina. The Government spokesperson added that Sr de la Encina's comments were "erroneous".

Last week, Salvador de la Encina, a PSOE MP for Cadiz had declared that "it is not Spain but the OECD (Organisation for Economic Co-operation and Development) and other international bodies", who describe Gibraltar as a 'fiscal paradise' and includes it in its 'grey list'.

The OECD 'grey list' is a list of countries, 'jurisdictions that have committed to internationally agreed tax standards' but that have not yet substantially implemented these agreements.

Speaking to the Campo press, Sr de la Encina was responding to Gibraltar Chief Minister Peter Caruana’s recent appearance before the Foro de Cadiz, stating that Spain would be delighted if Gibraltar were to be removed from such a list.

Mr Caruana said that "if from now on there is a willingness to operate with total transparency toward the Spanish Treasury in financial and fiscal matters, and Gibraltar is able to be removed from the list, that would be extremely positive".

"Spain would be delighted with that, but Gibraltar has to convince these international organisations."

Mr Caruana reiterated his offer to Spain of "total (fiscal) transparency", through an agreement for the exchange of tax information, during a conference he gave at the Foro de Cadiz this week, in an attempt to encourage Madrid to cease to consider Gibraltar a tax haven.

However Sr de la Encina declared that the Gibraltar Government should back these statements by implementing effective measures aimed at achieving greater transparency to be removed from the grey list and cease to be considered a tax haven.

The Gibraltar Government statement yesterday added that Sr de la Encina "appears not to be aware" that this was offered by Gibraltar in the run-up to the July 2008 Ministerial meeting of the Trilateral Forum in London. The offer was also included and agreed to, in the Joint Communiqué of that meeting issued by the Foreign Ministers of the UK and Spain, and Gibraltar's Chief Minister. Accordingly, the Governmnt statement added, neither the UK, nor Spain or Gibraltar "considers it difficult at this time".

The Government also said that Sr de la Encina’s statement, commenting on who is responsible for securing the removal of Gibraltar from the list of tax haven, was "also erroneous".

"Contrary to his statement, Gibraltar has not asked Spain to remove Gibraltar from any international list.

Gibraltar has offered Spain an agreement so that Spain is able to stop considering Gibraltar to be a tax haven under Spain’s own national legislation, which stipulates a clear and specific criteria for the removal of countries and territories from its own list of tax havens."

The Gibraltar Government statement concluded:

"No one in Gibraltar or elsewhere will understand any reluctance on the part of anyone in Spain to enter into an agreement of this type which delivers what Spain has criticised and demanded of Gibraltar over so many years."

As I've said before... it's a mystery to me too... but... no doubt they (Spanish politicians) will continue... ad nauseaum... to bang on about it for ever!

The question is... why does Spain continue to avoid the issue and continues to refuse to enter into a tax transparency agreement with Gibraltar?

One answer might be because it would obviously immediately take away a favourite stick of theirs. A cosh that many of their politicians, such as 'Blanca Luz'... or indeed many of their ill informed citizens... jumped up 'n'er do wells' such as 'Don Quixote de Marichalar' for instance, constantly enjoy bashing Gibraltar with at every and any opportunity!

Of course... then there's another possibility... one more Machiavellian reason why they do not want to enter into a tax transparent agreement with Gibraltar. Could it be... that they worry about what might show up... from their own inner circles? Could it be... that they don't want to kill their very own goose that's laying so many golden eggs for so many of them??

HM Treasury report sets out challenges and opportunities for British overseas territories

British offshore financial centres including Gibraltar could benefit from the global economic downturn by seeking new business while meeting tight standards on tax transparency, according to a preliminary report published by the UK Treasury yesterday.

The opportunities could even include management of the toxic assets that led to meltdown in the banking sector, the report suggests.

But in targeting new areas, British jurisdictions must ensure that they comply with international regulatory standards, it added.

Brian Reyes, writing in today's Gibraltar Chronicle says the report was immediately damned as "deeply disappointing” by British unions". They said the review failed to address the negative impact of offshore jurisdictions on the world’s economy.

The Treasury's progress report by Michael Foot, a former director of the Bank of England, sets out the challenges and long-term opportunities for Britain’s overseas territories.

Mr Foot was asked by the Chancellor of the Exchequer, Alistair Darling, to conduct a deep review at a time when the global financial crisis has put offshore jurisdictions under close international scrutiny.

"Meeting regulatory standards is not only important for the integrity of the financial system, but also for attracting financial services business from centres which are unable to do so", the report said. It added:

"Recent developments, particularly in the run up to the G20 London Summit, have moved tax issues up the political agenda.

The renewed focus on tax transparency and tax avoidance will have implications for the financial centres covered by the Review.

The growing focus on tax avoidance and the emergence of national initiatives such as the US Stop Tax Haven Abuse Bill will continue to shape international opinion in the short to medium term.

Each centre will need to take this into account in balancing the real or perceived competitive advantages of current tax regimes with the need to generate sufficient revenue to support its domestic economy."

But the UK’s Trades Union Congress said Mr Foot should have adopted a tougher approach to the review.

"The PM and Chancellor have made it clear that they want to ‘outlaw’ tax havens and the evasion and avoidance they promote", said TUC general secretary Brendan Barber in a statement.

"But this progress report suggests that this leisurely review is more focused on helping tax havens through their current financial difficulty than addressing the serious threat they pose to the global economy.

The Treasury needs to get a grip of this review and decide whether it is flowing with or against the grain of world opinion which has turned so decisively against tax havens since the G20."

Much of Mr Foot’s interim report focuses on the need to explore ways in which financial centres can ride out global economic strife and perhaps even grow from it.

He said the challenges for Britain’s offshore centres would be particularly acute in the event of a significant and protracted downturn in business in the financial sector. That is a key point because many of these financial centres have been very successful in attracting business and, as a result, are heavily reliant on this sector for revenue and employment.

"In relative terms, that reliance is much higher than in the UK, in some cases over five times higher", the report said.

"Added to that, the policy tools the financial centres have at their disposal to deal with economic volatility are generally more limited than those available to a sovereign state."

But Mr Foot was also clear about the opportunities that lay ahead.

"Even in a downturn, new opportunities may arise to offset retraction in certain areas of financial services business. Managing toxic assets from the banking sector may be an example of one such area", the report said.

"In other areas of business such as property and casualty insurance, underlying profitability remains strong.

But, because of global events, the business environment for the foreseeable future is likely to be more difficult than the financial centres have been used to."

Earlier this month, following a letter from British Prime Minister Gordon Brown to the UK offshore and Overseas territory jurisdictions including Gibraltar, "warning them to meet international transparency standards", the Gibraltar Government said:

Gibraltar is well advanced in the process of signing up tax information exchange agreements and fully expects to be in the category of countries that have fully implemented the internationally agreed standard, by the time that the OECD issues its next progress report in November 2009."

Further to the HM Treasury report published yesterday, Mr Foot is welcoming feedback from "interested parties". His interim report, which includes details of the consultation, can be viewed and downloaded here: British Offshore Financial Centres Report - HM Treasury.

Gibraltar committed to OECD 'tax haven' delisting and tax sharing agreements

Yesterday, I commented on a post over at Tilting at Windmills, defending Gibraltar's inclusion in the OECD (Organisation for Economic Co-operation and Development) list of 'jurisdictions that have committed to the internationally agreed tax standards' but that have not yet substantially implemented these agreements.

I was therefore very interested to read a story in the Gibraltar Chronicle today quoting a report published in the Financial Times last Friday, which I missed, saying that British Prime Minister Gordon Brown has written to the UK’s offshore tax havens, including Gibraltar, "warning them to meet international transparency standards within six months or face sanctions".

These reports say Mr Brown has told these jurisdictions to sign at least 12 bilateral tax information sharing agreements by November.

The Chronicle say that in his letter to Chief Minister Peter Caruana, Mr Brown also welcomed recent steps taken by the Gibraltar Government in this context.

He referred to a statement issued by the Gibraltar Government ahead of the G20 summit in London, in which Mr Caruana reiterated Gibraltar’s commitment to OECD standards. A Chief Minister's Office spokesman at the Convent told the Chronicle:

"The Prime Minister highlighted the fact that that statement was well received."

Mr Brown also stressed the importance of the tax information sharing deal reached between Gibraltar and the US, and acknowledged that Gibraltar was in well-advanced negotiations with other countries.

Last week, even before he had received Mr Brown’s letter, Mr Caruana said he was confident that Gibraltar "would sign at least 12 agreements by November".

In early April, following the G20 Summit, the Gibraltar Government issued a statement welcoming the global raising of standards of financial services regulation, transparency and exchange of information, saying "Gibraltar is already very well positioned and well placed to prosper from" these agreements and added that the Gibraltar Government "is very comfortable with the outcome of G20, as it affects Gibraltar".

In the aftermath of the G20 Summit, the Gibraltar Government said the OECD "appears to have adopted, as a test of 'substantial implementation' of agreed tax information exchange standards, the entry into of around 12 Tax Information Exchange Agreements".

The OECD has published a Progress Report as at 2 April 2009 in this respect.

In their statement after the G20, the Gibraltar Government added:

Since Gibraltar has not yet signed 12 agreements, Gibraltar is categorized among 'Jurisdictions that have committed to the internationally agreed tax standard, but have not yet substantially implemented'. This categorisation is accurate and fair.

The countries listed as committed but not yet substantially implemented, (like Gibraltar), include reputable EU Member States like Austria, Belgium, Luxembourg and others such as Switzerland, Singapore and Bermuda.

Gibraltar is well advanced in the process of signing up tax information exchange agreements and fully expects to be in the category of countries that have fully implemented the internationally agreed standard, by the time that the OECD issues its next progress report in November 2009.

The Gibraltar Government considers that it is right and fair that no 'black list' emerged at G20, especially not one based on a new, sudden criteria of which
committed, active countries had had no prior notice."

Concluding their statement in the aftermath of the G20 Summit, the Gibraltar Government publicly repeated their offer to all OECD countries, which was made through the OECD in November 2008 and subsequently directly to these countries, "to enter into Exchange of Information Agreements, at their request".

The reports of Mr Brown’s letter today in the Chronicle, comes just days ahead of publication of an initial report on the UK’s offshore havens. Michael Foot, a former Bank of England director who was commissioned to write the report, will publish his interim findings on April 22.

I'm sure this report will be read with great interest in Gibraltar.

These reports, in the Chronicle today and in the FT last week, gave me the opportunity to refresh my memory on the Gibraltar Government's statements on their inclusion in this OECD 'tax havens' list... and I'm pleased to say these rather underline my comment yesterday in the post over at Tilting at Windmills, when I said that Gibraltar was not "wishing to act illegally and cock a financial tax snook at the rest of the world"!

The Gibraltar Government's position is clearly one of willing co-operation and are clearly committed to meet Prime Minister Brown's deadline on bilateral tax information sharing agreements by November.

In meeting these internatonal standards and deadlines however, the Gibraltar Government must still ensure they maintain their position in safeguarding Gibraltar's independent economy, as a beneficial tax jurisdiction for high net worth individuals (HNWI's) and offshore corporations.

As I said yesterday, I'm no lawyer or international finance expert, but I imagine this is a tricky balancing act for Gibraltar... and I do hope these agreements do not put at risk, Gibraltar's ability to make it's own way economically... in difficult and changing global financial markets and tax jurisdictions.

One final point on this is that I believe the Government and Gibraltar authorities should be given credit for the commitment and effort they are showing in meeting these international standards... rather than be castigated... as they often are by the uninformed or, especially by mischievous opportunistic politicians from our neighbours to the north! As the Gibraltar Government themselves highlighted in their statement, there are many other countries listed as "committed but not yet substantially implemented", (like Gibraltar), including reputable EU Member States such as Austria, Belgium, Luxembourg, Switzerland, Singapore and Bermuda!

In conclusion, it is worth reiterating the Government's stated position that "Gibraltar is well advanced in the process of signing up to tax information exchange agreements and fully expects to be in the category of countries that have fully implemented the internationally agreed standard, by the time that the OECD issues its next progress report in November 2009".

Don Quixote is alive and well and 'tilting at Gibraltar windmills'

That most famous of literary 'Hidalgos' Don Quixote is alive and well... and these days has replaced his trusty steed Rocinante... for a jet ski!

Those of you who may be unfamiliar with the term 'Hidalgo' may like to know this is a synonym term used in the ancient Spanish colonies and territories that would become known as the Kingdoms of Castile and Aragon.

The term described a Spanish 'noble' or 'hombre rico' ('rich man'), although with time it came to colloquially mean the lower-ranking gentry, the untitled, or the non-wealthy nobility (who usually may not have owned real property).

It should be noted that Hidalgos were exempt from paying taxes. Over the years the title lost its significance, especially in Spain. Kings routinely awarded the title in exchange for personal favors. By the time of the reign of the House of Bourbon, over half a million people enjoyed tax exemptions, putting tremendous strain on the state. Attempts were made to reform the title and by the early 19th century it had entirely disappeared, along with the social class it had originally signified.

The prototypical and most famous 'hidalgo' was of course the literary fictional character Don Quijote de La Mancha (Don Quixote in English). He is often referred to as 'The Hidalgo'. His possessions allowed him a meager life devoted to his reading obsession, and his concept of honour led him to emulate knights-errant.

A perfect example of a Hidalgo... or in today's parlance, a jumped up 'upstart', might be the aristocrat, politician and 'sailor' Alvaro de Marichalar... or to give him his full title, Álvaro de Marichalar y Sáenz de Tejada!

Did I hear you say rhubarb... rhubarb or was that a huge raspberry?? Oh OK then we'll call him Don Quixote de Marichalar. If it walks like a duck, talks like a duck, etc!)

Don Quixote de Marichalar (rrrrraspberry), our modern day Hidalgo, has decided to turn his attention to tilting at a few windmills in Gibraltar!

In a letter to the Gibraltar Chronicle, published today,
Don Quixote de Marichalar (rrrrraspberry) makes a scathing attack on Gibraltar, describing the Rock as "a refuge for thousands of tax free companies known as ‘brass plate’"!

Don Quixote de Marichalar (rrrrraspberry), apparently, is no stranger to Gibraltar, as he was here some years ago during one of his highly publicised jet-ski expeditions across Mediterranean ports.

In a vain and inaccurate thrust at Gibraltar's Financial centre, our modern day Don Quixote declares:

"It is a pity that the rest of Europe condones through inaction the last colony in Europe!"

Don Quixote de Marichalar (rrrrraspberry) has made a bit of a name for himself as an 'adventurer' though it's probably more accurate to describe him, in today's society, as a 'bit of a celebrity'. Apparently he is the first person to jet ski across the Atlantic (a pointless and idiotic feat to my mind... but each to his own).

Personally, I think the likes of Sir Ranulph Fiennes or Robin Knox Johnston, might have something to say about our Hidalgo being described as an 'adventurer'!

Perhaps more pointedly, our Don Quixote de Marichalar (rrrrraspberry) was forced to retire from the Spanish Air Force following an accident, having served for only two years. That's more in keeping with my impression of inept Hidalgos tilting at windmills and coming off the worst for it!

Don Quixote de Marichalar's (rrrrraspberry) credentials as an 'aristocrat' (usually known as wasters to you and me) are a little more credible though, as his grandfather was Viscount of Eza, a Minister for War with King Alfonso XIII and Mayor of Madrid. Grandad is also known for having helped establish Spain's social security system (something that our Hidalgo may be especially grateful to his Grandad for). His brother, who either has awful taste or awful eyesight, married the Infanta Eleanor of Spain, the daughter of King Juan Carlos and Queen Sofia. Maybe, in the best traditions of 'old aristrocracy' he may instead, perhaps like his brother, also have an eye for a 'good sponge'!

So, now that we have established our Hidalgo's dubious 'authoritative' credentials for commenting on Gibraltar's finance centre, we can move on to tell you what
Don Quixote de Marichalar (rrrrraspberry) had to say.

His diatribe against Gibraltar includes describing the Eastside project as "an illegal reclamation of land from Spanish waters, using platforms erected on the Spanish seabed". This, while claiming that the Rock’s main economic activity is "money laundering as stated by the GAFI-OCDE".

At best, our Hidalgo is being 'economical with the truth'. At worse, and to my mind in point of fact, he is being mendacious and mischievous, to say the least!

This mention of 'GAFI-OCDE' refers to the (Organisation for Economic Co-operation and Development or OECD in English). It relates to a report in June 2000, when Gibraltar was among 35 jurisdictions identified by the OECD as a tax havens. This report is often mentioned by Spanish politicians (and Hidalgos), when wanting to 'put the boot' into Gibraltar. What they always fail to mention is the further reports since, from both the OECD and the IMF in particular.

These Spanish politicians, (and our Hidalgo today), fail to mention that the OECD, long after the 2000 report was published, has since accepted the commitment by Gibraltar "to implement transparency and effective exchange of information for tax purposes" and has endorsed and implemented the standards required by the OECD. This is confirmed in a number of reports since and most recently in the OECD Progress Report in April 2009.

Don Quixote de Marichalar (rrrrraspberry) also said that "Gibraltar has tailored its own fiscal regulations repeatedly declared illegal by the European Commission"!

This statement is also inaccurate... or put quite simply another way... untrue!

As a result of having made a commitment in accordance with the OECD's 2001 Progress Report on the OECD's Project on Harmful Tax Practices, Gibraltar is not included in the OECD's list of uncooperative tax havens. What's more, it has also never been listed on the FATF Blacklist of uncooperative countries in the fight against money laundering. This can simply be proved by visiting the Financial Action Task Force (FATF - GAFI) website, where a search for 'Gibraltar' will reveal... NOTHING... no document related to Gibraltar. So, our Hidalgo's statement is simply a very mendacious tilt at this windmill... in other words... in simple language... a lie!

Furthermore, in 2007, the International Monetary Fund Report on the Detailed Assessment Report on Anti-Money Laundering and Combating the Financing of Terrorism once again endorsed Gibraltar’s robust regulatory environment.

According to the report:

"Gibraltar has a well-regulated financial sector.

The Gibraltar authorities are concerned with protecting the reputation and integrity of Gibraltar as a financial center, and are cognizant of the importance of adopting and applying international regulatory standards and best supervisory practices.

Gibraltar has a good reputation internationally for cooperation and information sharing."

Emphasising Gibraltar's willingness for transparency and co-operation in respect to its Finance Centre, only last week during the G20 London Summit, probably at around the same time as our Don Quixote was sharpening his mendacious quill, US Treasury Secretary Timothy Geithner and Gibraltar's Chief Minister Peter Caruana signed an agreement that will allow the two countries to exchange tax information.

Failed in flight and failed in politics

I am reliably informed that our Don Quixote de Marichalar (rrrrraspberry) has also been tilting at a few windmills in his own country. He has been having a go at Spanish national politics and not been particularly successful here either. In 2007 he joined Rosa Diez’s UP y D party (Union Progreso y Democracia). He stood for election to parliament for the province of Soria in 2008 and 'went down a storm', failed to obtain a seat, obtaining only 1,106 votes, representing a measly 1.97% of the votes cast! At least the voters of Soria know a prize bullshitter when they see one!

Our Hidalgo seems to me to be a bit of a failed fighter pilot and failed politician... but good at jet skiing, tilting at windmills and mendaciously mouthing off about matters that really don't or shouldn't concern him. He also sounds to me a bit desperate for cheap publicity!

Don Quixote de Marichalar (rrrrraspberry), in his letter to the Chronicle, makes a number of other ridiculous claims... (including one or two other lies) that I, quite frankly, cannot be bothered to answer or refute and would sooner treat them with the contempt they deserve... ignoring them... but I will answer them if pressed (please note)!!

Anyway... as a fitting final typically nonchalant and brave act, inherent in all good windmill tilters, with a flourish of his quill, our Hidalgo has also shown great insight (if not brains), in publishing his address, presumably encouraging us (or potential sponsors) to write to him. I am happy to oblige him and reproduce his address here for those of you who might want to let him know what you think:

Calle Azalea, 82 La Moraleja, 28109 Madrid Kingdom of Spain

That 'Kingdom of Spain' bit is his idea not mine! He has also made public his email address: atlantik2002@hotmail.com.

Which all rather makes life easier for those of you who may want to extend your cordial good wishes to him, in the same way as it makes it easy for those beloved SPAM harvesters, who I hope will also take full advantage (let's hope he has a good anti virus proggie but I would doubt it).

A footnote on Hidalgos

In terms of knights-errant... our particular 'Hidalgo', the subject of our piece here today... is certainly no knight... but I do believe he is 'errant'... and definitely another candidate for a truly great sailor and Knight... our very own Sir Francis Drake!

"So please your Majesty, to singe the King of Spain's beard; it has grown somewhat too long."

Tilting at Windmills - A disclaimer

In closing, I would like to point out that this 'Gibo's Tale' today, has no connection and does not refer in any way to my esteemed colleague Sancho, who excellently blogs over at Tilting at Windmills, and who may well have something to say on the subject of our Hidalgo, if and when the urge takes him!

Gibraltar and US agree exchange of tax information

Dow Jones Newswires reported this evening on a US Treasury announcement Tuesday that they have signed an agreement with the Government of Gibraltar that will allow the two countries to exchange tax information.

US Treasury Secretary Timothy Geithner and Gibraltar's Chief Minister Peter Caruana signed the agreement in London in advance of the G20 meetings this week.

The agreement allows for the exchange of criminal tax information relating to any taxable year and civil tax information relating to taxable years beginning after 2008.

Additionally, it calls for Gibraltar to provide the US with information on bank accounts in Gibraltar.

Good to see the 'Chief' has moved very quickly and rather adeptly foiled any problems that were likely in the wake of the US Government and other countries looking at the so called 'fiscal paradises'!

There'll be some worried looks exchanged around Spain's 'elite' when they read about this! What are they going to bang on about now?? Maybe they should focus on where they put their own money!

Gibraltar commits to share tax information

The Government of Gibraltar has reaffirmed its willingness to share tax information with other states as part of the global drive for tax transparency.

Writing in Accountancy Age, Judith Tydd reports that the Gibraltar Government's declaration comes just weeks away from global leaders meeting in London for the G20 summit, where international tax transparency and co-operation is thought to be high on the agenda.

In a written statement, the Government of Gibraltar said it "shares the view that international co-operation in tax matters has become increasingly important, and will inevitably and necessarily be an ingredient of the new financial order that will emerge in the aftermath of the current global financial crisis".

A Gibraltar government spokesperson said they have "concluded negotiations of the text of a tax information exchange agreement with the US, and anticipates the agreement will be signed shortly."

Government Statement

In the context of the ongoing debate and proposals for reform of the world financial system in the run up to the forthcoming G20 London summit, the Government of Gibraltar repeats its longstanding commitment to exchange of information on the basis of the current OECD Model Agreement. We share the view that international co-operation in tax matters has become increasingly important, and will inevitably and necessarily be an ingredient of the new financial order that will emerge in the aftermath of the current global financial crisis.

Gibraltar remains willing to participate in exchange of information on the OECD model basis.

Gibraltar is one of the countries and territories that has committed to the OECD standard. We have concluded negotiations of the text of an agreement with the United States of America, and of the operative parts of the text with another of the largest OECD countries. Both are due to be signed shortly. In November last year the Gibraltar Government offered such agreements to all OECD member countries, through the OECD itself. Others have also received the offer by direct bilateral approach.

Gibraltar is an integral part of the European Union, including its single market in financial services. Accordingly, all EU Regulatory and Supervisory directives and other laws, as well as all European Union laws, agreements and measures relating to transparency, exchange of information (including for tax purposes) and Regulatory co-operation and direct taxation already apply in Gibraltar. Gibraltar’s finance centre is thus “on-shore” the EU.

Gibraltar accordingly welcomes the current initiative to ensure the raising of the bar on a broader, more global basis. We welcome the recent commitment made by some countries to the OECD exchange of information standard, which finally levels the playing field in this important area.

Gibraltar accordingly re-iterates that it continues to stand ready to conclude bilateral exchange of information agreements with OECD countries as and when individual countries may wish to conclude such agreements with Gibraltar.

Guardian reports Good times on Main Street for thriving Gibraltar

The UK's The Guardian newspaper reported today on the "Good times on Main Street" and spoke of a "thriving Gibraltar".

The report says that Spaniards are flocking to the Rock looking for bargains created by the strong euro and a falling pound, causing Gibraltar's economy to boom.

Good times on Main Street - The Guardian story

A line of Spanish cars snakes past the Union flag and helmeted Gibraltarian bobbies at the frontier. But their owners are not here to reclaim Spanish sovereignty over the rocky peninsula. They are here to spend mighty euros on goods priced in cheap pounds.

As financial turmoil and recession sweep the world, this tiny, sun-baked strip of land on Europe's southern coast is proving a miraculous survivor thanks to a sinking pound and an economy that grows at a rate comparable to that of China.

Many of those cars end up circling around the car park of the Rock's largest supermarket, a local branch of Morrisons, as they fight to grab one of the few empty spaces.

"We used to come here just to buy cheap alcohol and cigarettes," said Jesús Martín, from the Spanish town of La Linea, just across the frontier. "Now we buy everything."

Spanish shoppers cram the Morrisons aisles, looking suspiciously at such quintessentially British foodstuffs as Marmite, baked beans and hot-cross buns, but snapping up everything from cheap milk to rice.

"Things used to be cheaper in Spain, but not any longer," said Ana Santos, who had come for nappies and groceries.

Articulated lorries arrive daily to fill the shelves at Morrisons with goods brought direct from low-cost Britain.

"Last Christmas was a record for the store," said Edward Macquisten, of Gibraltar's Chamber of Commerce.

"Everyday staples are now more expensive in Spain than they are in Gibraltar. That is unheard of. People come just to visit Morrisons."

Along Main Street, Spaniards are extending their British shopping experience to the local branches of stores such as Marks & Spencer, Bhs and Mothercare. Underwear, babygrows and make-up are all taken back into Spain.

Spaniards are not the only ones flooding across the border. British expatriates, some struggling to cope with the plunging value of their pensions against the euro, are coming from miles away to shop. Some drive for more than an hour from Málaga.

"We used to do our weekly shop at a Spanish supermarket but now we come here," said Ray Emerson, who lives in nearby Sotogrande. "It's just as cheap, if not cheaper."

Even Gibraltarians are spending more on the Rock. "We used to go over to Spain every Friday night for a Chinese and a drink," said health worker Sukh Khaira. "Now we stay here to go out."

Gibraltar's escape from the worst of the global downturn even extends to property. Sleek new high-rise apartment blocks line the harbour. Estate agent Louis Montegriffo said that, overall, prices were still rising slightly. Demand from rich foreigners seeking a safe harbour by taking up Gibraltar's offer of residency for "high net-worth individuals" is on the up.

"We actually saw an increase in the numbers looking at the beginning of the year," he said.

Over the past few years Gibraltar's economy has grown at up to 12%, more than doubling in size over a decade. Financial services, low taxes and a niche in online gambling have transformed an economy that, a quarter of a century ago, was more than 60% dependent on the Ministry of Defence.

"If we were a sovereign state we would be 13th in the world in GDP per capita," said the Chief Minister Peter Caruana. That would put it above Canada or Switzerland. Growth will slow with the global recession, he said, but will not stop.

The future looks relatively bright. The European court of first instance ruled in December that Gibraltar could set its own tax rates. Corporate tax is expected to tumble, attracting more business.

With offshore havens now on the global political hate list, however, Gibraltar may find itself under intense political scrutiny.

Marcus Killick, head of Gibraltar's Financial Services Commission (FSC), said the Rock's status as part of the EU placed it at the bottom of any list of offshore centres that might be targeted by politicians. Gibraltar has neither the banking secrecy of Switzerland or Andorra nor the non-EU status of the Channel Islands or the Isle of Man. "We are required to comply with EU directives," he said.

At his Image store selling souvenirs, cameras and cheap watches, Suresh Manji was not so sure about the future. "Things are down on last year. There are fewer tourists and local people are buying less," he said.

The tourist season has not started yet, but the 7 million visitors who cross the frontier every year are key to prosperity.

"That will slow down this year," Macquisten said. "There will be fewer British visitors to the costas and it follows that you will get fewer here."

Tim, an expatriate shopper from Marbella, 40 miles away, said: "You already see fewer people visiting their houses in Spain. I've got neighbours who normally come for public holidays. This year we haven't seen them."

Many Gibraltarians, however, will be praying the pound stays weak as they continue to roam the aisles in Morrisons.

Spain's El Mundo enviously picks up the story

In a typical tone of envious criticism, Spain's national daily, El Mundo, grudgingly reports on The Guardian story today, saying that it's the Spaniards who are saving Gibraltar from the global recession!

"Gibraltar is escaping itself from the crisis, not because its financial system is strong and secure or because its citizens have been more careful with their mortgages. No... nothing to do with any of that! It's Spaniards who are coming to Gibraltar to buy, taking advantage of the weakness of the pound, which is raising this British territory east of the Bay of Algeciras."

All I'll add is my grateful thanks to them... "Cheers me dears"!

$75 million of Madoff Assets located in Gibraltar

According to the New York Post, a lawyer for the trustee seeking to locate assets belonging to self-confessed Wall Street scammer Bernie Madoff said today that more than $1 billion has been located - far less than the staggering $64 billion the feds said he stole from investors.

Lawyer David Sheehan said $75 million has been located in an account in Gibraltar, raising to $1 billion the amount a trustee has recovered for investors.

David Sheehan, a lawyer acting for Irving Picard, who was appointed by the Securities Investor Protection Corp. to unwind Madoff’s businesses, also said at a court hearing today that French authorities may soon seek to seize Madoff’s chateau in that country, which is worth about $1.6 million.

Sheehan’s disclosure came at a court hearing where he urged a judge to award SIPC, which is conducting a broad investigation of the assets of Madoff Securities, a power of attorney over Madoff’s UK unit.

SIPC is a government-backed corporation to cover losses when brokerages fail. US prosecutors probing Madoff urged US District Judge Louis Stanton in New York to hold the power in escrow and not to grant it to Picard. Stanton didn’t rule on the matter.

Madoff, 70, was jailed two weeks ago after he pleaded guilty to orchestrating a Ponzi scheme where he ripped off thousands of investors.

Madoff faces 150 years behind bars when he is sentenced in June.

Missing Madoff Money Found in Gibraltar Bank

In a Daily Beast exclusive, Lucinda Franks reports that at least $50 million in Madoff funds has been discovered in a Gibraltar bank.

Now, the fight begins over who actually gets it.

More than $50 million in missing Bernard Madoff funds has been found in the Gibraltar branch of the International Safra Bank and is likely to become the subject of litigation there. The bank, seeing Madoff’s name on transfer documents, froze the money and notified police.

According to a Franks' source close to the investigation, the Gibraltar case is just one of many instances in which banks in Europe and the Caribbean have identified and stopped any monies with a link to Madoff’s investment funds since December, when he confessed to running a massive Ponzi scheme.

Millions of dollars linked to Madoff have been tagged and frozen in offshore banking havens in Europe and the Caribbean.

The Gibraltar funds were deposited at Safra just a few weeks before Madoff was exposed, according to a source close to the Gibraltar police. This money may have been placed with Madoff through a feeder fund operated by Safra, which asked Madoff to redeem a portion, but not all, of its investment—somewhere between $50 million and $75 million. The returned funds were still being held in the Safra branch when the scandal broke.

After the bank put a stop on the funds, local police informed authorities in the US and are now cooperating with the New York investigation.

Gibraltar, like some other offshore havens, has been making great efforts in recent years to police illegal activity. On Friday, there was a proceeding in chambers at the Gibraltar court. The outcome of this hearing is not yet known.

In general the behavior of the international banking community in the Madoff case demonstrates an unprecedented level of cooperation with American prosecutors—far more, certainly, than investigators received in earlier cases such as the BCCI scandal.

There was a possibility, of course, that any overseas transfers in this time frame could be part of a scheme by Madoff to hide assets. But the Gibraltar transfers could also reflect legitimate withdrawals from his investment funds, made without any connection to the Ponzi scheme. Those investors will probably sue to have the funds released, while the New York-based trustees are equally determined to claim the money for victims’ compensation.

Even investors who cashed out of Madoff’s scheme before it collapsed may not be entirely protected from losses. In a legal procedure known as a “clawback,” trustees overseeing fraud cases can force investors to return funds they withdrew earlier from the phony operation in order to distribute it evenly among those affected. Unlike in, say, a stock crash, clawbacks mean that there is no such thing as "getting out at the right time."