Since its restructuring in 2009, the OECD’s Global Forum on Transparency and Exchange of Information for Tax Purposes has accomplished quite a lot. With more than 150 member jurisdictions, the global forum has worked on strengthening countries’ implementation of the exchange of information on request standard through peer reviews; introduced the automatic exchange of information standard, which will also be subject to the peer review process; and putting a stronger focus on beneficial ownership information transparency. But as the global forum prepares to celebrate its 10th anniversary in 2019, it will do so without Monica Bhatia, who has served as head of its secretariat since April 2012.
Bhatia, whose contract expires March 31, plans to return to serve in some capacity in the Indian government, where she had spent more than 20 years in the Ministry of Finance. In an exclusive with Tax Notes, Bhatia reflects on her experience at the OECD and what she’ll take with her in her future endeavors.
Tax Notes: Your last global forum plenary meeting was in November 2018 in Punta del Este, Uruguay. How did it feel?
Monica Bhatia: It’s been extremely satisfying to see how far the global forum has come in the last seven years, and at the same time it was very emotional. What we’ve built over the years is a great and unique institution. Those who have interacted with the global forum talk about how unique it is, not just in terms of what it has achieved in such a short time . . . but in terms of the community that has been built. There are a lot of good relationships and good vibes. People care for each other, whether it’s a tiny island to a big country — they all feel they are a part of something good.
Tax Notes: What are you most proud of accomplishing, and what do you wish you could have seen through to completion?
Bhatia: The very fact that information exchange is now part of any tax administration’s fundamental tools, it’s fantastic to see. Seeing changes on the ground — not just churning out reports but seeing the reports having an impact, having fought against bank secrecy for tax purposes and now fighting against anonymous shell companies, that has been very satisfying.
Also, the expansion of the global forum [membership] from 110 jurisdictions to 154 now. So the widening [and deepening] of tax cooperation with automatic exchange of information and tax cooperation becoming a basic tool, that’s been very rewarding.
I wish developing countries would raise tax transparency more. The progress has been great, but I would like to see more progress, I would like to see developing countries being able to engage fully and being able to benefit. That’s beginning to happen, but I wish the pace had been faster. Hopefully it will grow in the next few years.
Tax Notes: Where do you see the global forum going in the future?
Bhatia: I think it’s going to evolve to become the foundation for many other fights against financial crimes. Tax authorities are now much better equipped than anyone else in terms of their ability to get information. They’ll have to be central to any government strategy to fight financial crimes and corruption.
Initially, the global forum was about ending bank secrecy. That work is done — bank secrecy is really over. The forum will continue to focus on tax issues, but its work is going to have spillover effects on other things. And as tax authorities get information, especially automatic exchange of bank [account] information, it is going to trigger changes in fighting other kinds of financial crimes.
Tax Notes: How will the issue of beneficial ownership transparency continue to play a role in the fight against financial crime?
Bhatia: Really, the centerpiece remains beneficial ownership because that is at the core of all the fights against money laundering, corruption, and other kinds of crimes. Secrecy of legal entities and arrangements is a barrier for any kind of law enforcement.
Even though we recognize that tax information remains confidential and is to be used for tax purposes, there are countries that are exploring the whole-of-government approach and [discussing] with each other on whether they can use it for other purposes. That, I think, is a gateway to countries having interlinked or coordinated strategies to fight financial crime and illicit flows, and that’s where the importance of the work of the global forum is going to go beyond just fighting tax evasion.
Tax Notes: What have you learned during your time as global forum head?
Bhatia: I could write a book on that! One thing I’ve learned is change is very much possible if you put your mind to it. Multilateralism is possible, and this is a very successful example. In any institution, the most important thing is the people. If you work with people and their constraints and challenges, you can achieve a lot.
Tax Notes: What qualities would your successor need, and what kind of advice would you give to him or her?
Bhatia: They will need the ability to lead through difficult changes globally, the ability to get along with people, a lot of patience, a lot of good humor, and passion. We all have strong passion for this work, and to really believe that this is important. That passion can drive the change that’s needed. I’ve seen very exciting times but there’s more to come.