The meeting between 19 member states of the Organization for Economic Cooperation and Development (OECD) in Berlin on Tuesday was but the latest step in a highly touted international initiative to crack down on tax evaders.
Estimates of the amount of taxable money hidden in secret bank accounts around the world range between $1.7-11.5 trillion (1.2-8.3 trillion euros). With most major governments spending massively on stimulus programs to offset the global economic downturn, revenues from these funds would come in very handy.
A number of large industrialized nations have announced agreements in recent weeks with countries accused of being tax havens - from Switzerland and Luxembourg to Bermuda and the Bahamas. But as the example of Switzerland shows, the devil is in the details.
"Banking secrecy is only suspended in case of concrete suspicion, when the name [of the account holder] and bank are specified," Swiss banking expert Manuel Ammann told Deutsche Welle. "And from experience, we know such concrete cases don't occur all that often."
The practice of using foreign accounts to hide money from tax authorities, say critics, is likely to continue as long as requests for information have to be made on a case-by-case basis.
"It's an arduous and ineffective path," Andreas Missbach, an expert on Swiss banking for the Swiss NGO Erklaerung von Bern, told Deutsche Welle. "The agreements between Switzerland and countries like the US only apply to individual requests, and it's unclear whether they are retroactive. Switzerland would like to keep the illicit money."
All in all, Missbach said, the attempt to rid the world of tax havens is "toothless."
The OECD has been trying to bring about reforms in this area for more than a decade and has been taking the lead in current attempts to increase international banking transparency.
Experts form the organization's member states have formulated a set of standards, to which countries are expected to adhere. They mandate "the exchange of information on request where it is 'foreseeably relevant' to the administration and enforcement of the domestic laws of the treaty partner," as well as the lifting of "restrictions on exchange caused by bank secrecy or domestic tax interest requirements."
Switzerland has taken steps to conform to these standards and is currently on the OECD's "grey list" of tax havens, indicating those countries that are willing to cooperate more but have so far failed to provide enough transparency. But the organization itself is a coordinating body and not an international financial policeman.
"The OECD works on the basis of a mandate from its member countries," Matthias Rumpf, the press spokesman for organization's Berlin office told Deutsche Welle. "The actual process is in the hands of individual states. We accompany and support this process."
The best chance for meaningful change may be public outrage that some individuals and companies are cheating their national tax authorities, while ordinary people are asked to foot larger and larger bills.
"The basic mood has changed and a lot more is known about tax havens," Missbach said. "That's put governments under pressure. But going after tax havens is not their priority. It's a half-hearted affair."
Individual countries have to balance their desire to track down cheats with their need to get along with major economic and financial partners.
Last year, German Finance Minister Peer Steinbrueck raised hackles in Switzerland by calling for it to be put on the OECD's black list. Summits like the one in Berlin are as much about mending fences as fundamental reform.
"Burying the hatchet is part of the agenda, "Missbach said. "No one is interested in disrupting that."
After the G20 summit in London this April, the organization proudly proclaimed: "The era of banking secrecy is over." But in reality that's far from being the case.
"The US has also had to be satisfied with how Switzerland is implementing current OECD standards," Ammann said. "And if that's the case, you can safely say there's no threat to Switzerland or its banking secrecy."
And while the public debate has largely focused on wealthy countries, there's a lot riding on the outcome of the process for the world's poorer nations as well - which depend on the rich ones for aid.
"The general tendency and direction has to be toward the automatic sharing of information," Missbach said. "That's going to be crucial for developing countries."
But for many decades, tax havens have been the dirty, not-so-secret secret of the international financial world. And it's hard to imagine them being eradicated any time in the near future.
Author: Jefferson Chase
Editor: Rob Mudge