Foreign and Commonwealth Office
London SW1A 2AH
Telephone 01-
Mr
Misodiy
haw D'R
Ry 4/4
Hati
270 257MAY 1990
STRY
рад
16/4.
B J Canty Esq, OBE Government House
ANGUILLA
Your reference
Our reference
SGlaiv
Date
5 April 1990
R
Laken
Der Gevener,
OECD: EXTENSION AND APPLICATION OF CONVENTION AND INSTRUMENTS
1.
We hope soon to be able to take practical steps with the OECD to ensure that those of the Dependent Territories and Crown Dependencies who wish to be bound by the OECD Convention and Instruments are so regarded. We already recognise the particular concerns of the Channel Islands, the Isle of Man and Gibraltar in this respect. But we have not yet sought to sound out other DTs who may be interested. therefore writing to set out the advantages and disadvantages involved and to seek your government's considered view on whether or not it would wish to be bound by the OECD Convention and Instruments.
I am
2. As general background on the origins and nature of the OECD, I attach a copy of a useful piece from The Economist.
Benefits
3. While circumstances vary greatly, the main advantages of being bound by the OECD Convention lie in the financial sector.
Chief among these would be the respectability that derives from submitting to the disciplines of the two OECD Codes - Liberalisation of Capital Movements and Invisible Operations, and the National Treatment Instrument (as background, I attach a short note describing how the Codes work). Coverage by the OECD Convention would oblige OECD member states to extend to the relevant Territories the same benefits they confer on other OECD states. The advantages for companies or individuals based in these territories could be significant. A broker based there could buy and sell freely on behalf of clients throughout the OECD area; banks wanting to lend money abroad or enterprises interested in issuing securities in OECD countries could all stand to gain. For example, the French recently announced that they will now allow OECD nationals to issue or introduce securities on the French stock exchange on the same basis as French and EC Citizens. The Codes have recently been extended to cover cross-border financial operations, which could make them even more attractive to companies or individuals based in UK Territories.
4.
There is also a further practical benefit from those OECD countries who discriminate in their laws, rules or administrative practice in favour of the OECD. A recent OECD study identified several cases of positive discrimination for OECD members in the areas of inward direct investment and establishment, capital movements, banking, financial services, insurance, transport and transfers abroad. For example the Japanese have easier rules for institutions