“Do As You Would Be Done By”

Members of the International Tax and Investment Organisation (ITIO), a grouping of small and developing economies, have reviewed current taxation, trade and e-commerce challenges and the need to strengthen financial anti-terrorism mechanisms following the terrorist attack on the United States.

Outcomes of the fourth meeting of the ITIO, which took place on 12-14 October 2001 in the Cayman Islands, are as follows:


Members examined the current position of the anti-tax competition initiative of the Organisation for Economic and Development (OECD). The meeting restated the importance of applying international exchange of information and transparency standards on a level playing field. To be effective, uniform standards must be universally adopted, without discrimination. OECD member states and other developed economies should explicitly confirm their intention of abiding by the standards demanded of small and developing economies (SDEs).


The meeting discussed the relationship between trade, inward investment and taxation. Members were concerned that the sanctions threatened by the OECD tax initiative could constitute non-tariff barriers to trade in services, which would be incompatible with multilateral trade obligations. The meeting reaffirmed that all incentives, whether tax-related or otherwise, should be considered as a whole. Members would encourage other international organisations to address the linkage between trade and taxation policies.


ITIO members expressed concern about the potentially adverse implications of discriminatory EU and OECD proposals for taxing exporters of e-commerce services from developing countries.


Speaking after the meeting, Lynette Eastmond, Director of the ITIO Secretariat, said: *”As free and democratic countries, members of the ITIO express their abhorrence at the brutal terrorist attack on the USA. We are determined to cooperate fully with the United States and the coalition against terrorism.

“There is no automatic connection between countries with low or zero tax rates and terrorism. We will continue to work with other free and democratic governments to cut off terrorists’ access to funds.”*

The International Tax and Investment Organisation (ITIO) is a grouping of small and developing economies (SDEs) set up in March 2001 to help SDEs respond to global tax and investment challenges. It explicitly considers the development implications of these challenges.

The ITIO currently comprises Anguilla, Antigua and Barbuda, Bahamas, Barbados, Belize, British Virgin Islands, Cayman Islands, Cook Islands, Malaysia, St Kitts & Nevis, St Lucia, Turks & Caicos and Vanuatu. The Commonwealth Secretariat, Pacific Islands Forum Secretariat and CARICOM Secretariat have observer status.

Issues which the ITIO is addressing include:

-The OECD’s initiative against tax competition;

-Clarification of the linkage between trade and taxation policies;

-Discriminatory EU and OECD proposals for taxing developing-country exporters of e-commerce services;

-Strengthening financial anti-terrorism mechanisms; and

-The OECD threat to all geographically mobile service industries (including banking, insurance, reinsurance, fund management, leasing, factoring shipping, distribution centres and the new growth sector of e-commerce, software and electronic data processing).

23 October 2001

Contact Information:

Ben Coleman
International Tax and Investment Organisation
The Business Centre, Upton, St Michael, Barbados
Tel. +246 430 2200, Fax +246 228 6167
(office) + 322 645 9881 or (mobile) +44 (0) 7958 616 444