ST. MICHAEL, Barbados — Under pressure from rich countries that want to recover billions of dollars lost to tax evaders, smaller nations that were singled out as secretive offshore tax havens met with their critics Monday in an effort to protect their lucrative banking industries.
Officials from about 40 countries and territories met behind closed doors to exchange views on what the Organization of Economic Cooperation and Development, a group of wealthy industrialized nations that includes the United States, terms "harmful tax practices."
The Paris-based organization has set what it calls international standards that it wants all nations to abide by. It is pushing nations with no-tax or low-tax regimes to change their tax laws.
Leaders in the Caribbean, home to some of the world's most attractive tax havens, say the developed countries are imposing the standards and trying to take away revenues from small islands with fragile economies.
"Those who gain market share call it exploiting the competitive advantage. And those who lose call it harmful," Prime Minister Owen Arthur of Barbados said in an opening address.
Arthur, however, also urged dialogue in an effort to reach common ground.
"It is only through consensus-building and cooperative action among states that we will arrive at norms and practices that are universally accepted and applied, and can eradicate activities that are patently illegal," he said.
OECD Deputy Secretary-General Seiichi Kondo said the organization's recommendations are aimed at ensuring economic stability.
"We are not trying to set minimum tax rates, or in any way to interfere with the legitimate concerns of individual citizens to protect and maintain their privacy," Kondo said.
Money laundering involves exchanging or investing funds earned from illegal activities such as drug trafficking to conceal the source and make the money appear legitimate.
Although they bristle at the outside judgments, many Caribbean leaders are eager to avoid the stigma of being linked with dirty money, and a few have changed their laws to make them more open to foreign investigators.
The United States and Britain issued advisories warning their banks to scrutinize transactions through countries on the money-laundering list, and some islands have reported losing offshore banks since then.
The United States and some other OECD member countries are threatening sanctions against governments that do not cooperate with efforts to curb tax evasion and money laundering.