another terrific move. kudos! m.

GUARDIAN UK Nick Mathiason 4 March 2009

Barack Obama’s new administration has endorsed far-reaching legislation to crack down on offshore tax havens in a move that could end centuries of banking secrecy.

The landmark decision to prise open “secrecy jurisdictions” came last night from US treasury secretary Timothy Geithner at a congressional hearing.

It will be seen as a severe blow to places such as Jersey, the Cayman Islands and Switzerland, which store an estimated $13 trillion (£9.2tn) of privately held, untaxed wealth.

“We fully support the legislation… on offshore tax centres, and we look forward to working with you as part of the broader effort to address international tax evasion,” Geithner told the house ways and means committee.

Obama’s decision to stamp down on tax haven abuse, estimated to deprive the US government of more than $100bn a year, could put him on a collision course with Gordon Brown.

Brown will come under intense pressure to resist the move from the City and the many tax havens which are UK dependencies or overseas territories.

Britain has recently come under international criticism for failing to join European measures to reveal the identities of those who deposit huge wealth in tax havens.

Key measures in the new legislation, likely now to be in force by the end of the year, include revealing the beneficiaries of secretive trusts and identifying “offshore secrecy jurisdictions” that “unreasonably restrict US tax authorities from obtaining needed information”.

Senator Carl Levin, who along with Obama tried to introduce similar legislation in recent years, only for it to be thwarted by George Bush, said: “President Obama’s support for the Stop Tax Haven Abuse Act, as announced by treasury secretary Geithner, is very welcome news and greatly improves the chances of an offshore tax bill becoming law this year. It also sends a strong signal to tax havens that this administration is not going to tolerate the kind of offshore tax abuses that have been draining $100bn a year from the US treasury and that, as a result, offload the tax burden onto the backs of honest taxpayers.”

The US underlined its intent to crack down on tax evasion last month when it demanded that Swiss bank UBS surrender the names of 52,000 American account holders.

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