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Sarkozy to push G20 on tax haven sanctions

French President Nicolas Sarkozy will push his G20 partners to agree on imposing sanctions on uncooperative tax havens as of next year.

business Updated: Sep 26, 2009 12:03 IST

French President Nicolas Sarkozy will push his G20 partners to agree on imposing sanctions on uncooperative tax havens as of next year.

Speaking on the eve of the Group of 20 summit, Sarkozy said that "one of the issues at stake at Pittsburgh was applying sanctions starting from the first quarter of next year on countries that do not respect regulations."

At the G20 summit in London in April, leaders of the world's leading economies agreed to stamp out tax havens as part of a global effort to catch illegal tax evaders.

"Tax havens, banking secrecy, that's all over," Sarkozy said in an interview to French television from New York where he was attending the UN General Assembly meeting.

"I will fight for sanctions tomorrow in Pittsburgh."

Ten countries including Austria, Belgium and Luxembourg have so far been removed from a blacklist drawn up by the OECD after they agreed to implement new rules allowing for greater transparency in their banking systems.

Tax havens have come under intense scrutiny following last year's global financial crisis that sparked calls for radical action to curb abuses blamed for the debacle, among them tax evasion and bank secrecy.

Turning to the thorny issue of bankers' bonuses, Sarkozy said G20 governments were "wrangling" with proposals and that no agreement had been reached yet on curing big payouts.

"We clearly want the bonus amounts to be capped based on, for example, a percentage of turnover or a fixed amount," said Sarkozy.

"We can't become completely fixated on bonuses but they are the tip of the iceberg," he said. "Capitalism cannot go back to what it was."

While growth figures show the French economy is pulling out of recession, Sarkozy cautioned that he would not declare an end to the crisis until the outlook for jobs improved.

"We will have come out of the crisis when unemployment starts going down," said Sarkozy.