Organisation for Economic Co-operation and Development controversy

Organisation for Economic Co-operation and Development controversy

Some decisions, actions or reports made at or by the Organisation for Economic Co-operation and Development (OECD) have raised controversy.


OECD and soft law

Unlike other inter-governmental organizations like the United Nations or the European Commission, the OECD cannot edict laws and doesn't have the power to coerce a country, member or not, to alter its policy.

However, it can have an influence on national policies through soft laws, by issuing "recommendations", "guidelines" and other "manuals", that countries or companies can refer to. Some of these guidelines have become de facto standards, such as the OECD Guidelines for the Testing of Chemicals or the OECD Model Tax Convention.

Also, negotiations and agreements between representatives of member countries can happen at the OECD, and have direct consequences in national laws.

OECD and taxation

Tax havens

The OECD and its Financial Action Task Force regularly publish the list of uncooperative tax havens.

The effect of the FATF Blacklist has been significant, and arguably has proven more important in international efforts against money laundering than has the FATF Recommendations. While, under international law, the FATF Blacklist carries with it no formal sanction, in reality, a jurisdiction placed on the FATF Blacklist often finds itself under intense financial pressure. As a result of the FATF 40+8 Recommendations (among other initiatives), most countries now require their banks to report certain suspicious financial activities to the appropriate financial regulators and law enforcement authorities. (In the United States, these are called Suspicious Activity Reports or S.A.R.'s.) Most larger countries with significant financial centres consider transactions coming from or transferring to a jurisdiction on the FATF Blacklist to be a suspicious activity, which automatically triggers closer regulatory scrutiny (and considerably more paperwork on the bank's part). Because of this, many major financial institutions will not conduct business with counterparts based in NCCTs. Since many of the countries that FATF originally listed as NCCTs have major financial industries (i.e., the Bahamas, Cayman Islands, Liechtenstein), such de facto boycotts could have a significant effect on a country's economy (or at least a politically powerful sector of the economy).

Pro-tax lobbying

Some observers, such as the FreedomWorks foundation, argue that the OECD is lobbying for more taxes. In book series such as their Economic Survey of countries, OECD analysts advise countries on their policies including tax. Such groups also remark that the OECD is funded by tax money.

Multi-lateral Agreement on Investment

The Multilateral Agreement on Investment was negotiated at the OECD between 1995 and 1998. While this discussion was not secret, it had low public awareness until a draft report was leaked in 1997. This had led to massive outcry and an intensive campaign against it. Eventually, countries gave in and cancelled the agreement.

Broadband statistics

The OECD periodically publishes indicators on internet connections known as the OECD Broadband Statistics. The USA often have a disappointing rankings in the most prominent indicators, which is why[clarification needed [Disappointment does not imply questioning relevance.]] several USA-based organizations, such as the Information Technology and Innovation Foundation, question the relevance of the OECD data and propose their own alternative composite indicators[why?].

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